According to new industry forecasts, there will be a drop in the global smartphone production in the first quarter because of the coronavirus crisis. The report also noted a drop in confidence of consumers in Europe because of the impact of the spread of the virus on other industries as well.
Temporary shutdown advice by Chinese authorities for smartphone factories across China to prevent the spread of the virus has impacted a number of smartphone makers. Chinese authorities have also imposed strict restrictions on traveling in many parts of the country as well as banned large gathering of people at any place.
Compared to the first three months of 2019 at 310 million units, production of smartphones in the January-March quarter will be down by 12 per cent at 275 million units, predicted the analysis firm TrendForce. The report also predicts a 10 per cent drop in production of iPhones Apple and a 15 per cent drop in smartphone production by Huawei.
“Delayed resumption work and uncertainties in employees’ returns will cause the monthly delivery of key components to be postponed, thus affecting the progress of smartphone production,” TrendForce said.
In a separate report by the research firm Canalys, analysts have forecast that during the first quarter, the sale of smartphones in China will drop by at least 50 per cent because a large number of retails stores remain shut while production of phones have also been hit.
Chinese authorities on Monday granted permission to the Apple supplier Foxconn to start production in one of its factories in the city of Zhengzhou even as the company has transformed some of its production lines to manufacture surgical masks for its own staff. However Foxconn’s other production units, including its major production unit in the Longhua district of Shenzhen, still have not been allowed to resume production.
There are poor airflow and central heating systems at Foxconn’s factories which make them a place for “high risk of coronavirus infection”, fear government officials in China, according to a report published in the Nikkei business daily.
According to the research group Sentix, anxiety about the impact on global trade of the virus outbreak has resulted in a drop in investor morale for the first time in four months in the eurozone.
“While at the beginning of the year there was still a clear upswing scenario for the global economy, the outbreak of the coronavirus in China has changed the situation significantly. The drastic measures taken by the Chinese government for the Hubei region show the danger to the global economy if the outbreak cannot be limited regionally,” said Sentix managing director, Manfred Huebner.
The temporary shutdown in China has affected a wide range of industries – from fashion to restaurants to the global auto industry, because most of these industries have major production operations in China or depend heavily on parts manufactured in factories in China.
(Adapted from TheGuardian.com)