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The Chinese Mobile Market Takes a Hit Due to Coronavirus

The Chinese Mobile Market Takes a Hit Due to Coronavirus

After China got rid of SARS, the lethal virus that hit the country almost 17 years ago, China, and the world are now facing a much more dangerous virus that is spreading faster than wildfires! The coronavirus is threatening billions of lives not only in the sense of infection but also in the sense of gravely affecting the Chinese economy to a point where the people will no longer be able to work and earn their living as time goes by.

Most Chinese families had to stay at home upon orders from the government to try to stop the coronavirus from spreading further. Work has been suspended not only in Chinese companies and factories, but also in American and other international companies that have prevented its employees and workers from traveling to China and shut down all of its China-related operations such as Apple, Amazon, Tesla, and more.

Although the WHO doesn't recommend any company or business entity to take any unnecessary measures that can disrupt the international trade or traveling movement, Major international airline, entertainment, and tech companies are suspending their operations in China causing the country to lose over $60 billion this quarter alone!

Some would think that these companies are overreacting; however, when checking the numbers, we found out that the coronavirus victims have exceeded in one month what the SARS virus has hit in a 9-month period by 11,000 souls!

 

How much is the coronavirus costing China & the world?

The economic effect stemming from the coronavirus leading to local and international factories shutting down all over the country will extend into the future even after the virus is gone as the government will have to decrease the taxes and lower the interest rates as well as increase the spending in order to preserve the economy from collapsing due to the coronavirus outbreak.

Considering that, last year, the Chinese economy was already at its weakest points in the past 30 years, it is expected for the country to witness a huge rise in debt and to, most definitely, lose its economic competition that it went through with the United State for decades.

Chinese government and banks have already started their measure to contain the economic losses from the coronavirus outbreak by lowering the interest rates especially for individuals and small businesses that are located in the most affected areas by the virus such as Wuhan. The Bank of China has granted all of the Hubei province residents the opportunity to delay the payments on any loans for months since the coronavirus has forced them to leave and, potentially, permanently lose their jobs.

 

Factories & stores shutting down all over China

Cities like Wuhan, where the first to witness the coronavirus outbreaks, have become almost completely deserted with people confined within their homes, had witnessed factories and stores shutting down entirely. Megastores like Ikea, Starbucks, and Apple Stores have closed their doors with no hope to reopen them anytime soon. Stores that did not decide to close, such as Nike, McDonald's, and Under Armour are losing magnificently in sales because the malls where these stores are located are becoming deserted with no visitors. Losing sales at such a rapid pace will eventually lead these stores to close as well to avoid any additional losses. 

While the government has extended the Lunar New Year's holidays in hopes that by the time the holidays are over, the coronavirus would be contained and dealt with, automotive companies such as Toyota and General Motors are holding off production waiting for their employees to return.

This situation was further intensified with multiple airlines such as United, Delta, and British Airways suspending flights to and from China.

 

Also Read:-Apple is Looking to Rely on Recycled Parts for New iPhone Models

 

Chinese Huawei factories are still up & running!

While other mobile and tech giants such as Apple & Amazon and even Walmart that rely on Chinese workers and customers alike are taking a direct hit by losing a huge market share in China as they proceeded to suspend all of their operations in China, some Chinese companies are still up and running like Huawei!

After the extended Chinese New Year holidays, Huawei has reopened and continued its manufacturing process on the first Monday of February. To ensure that everything is fine and no risks are being taken in terms of the employees' health, all employees have been tested and confirmed to have no infections. They were also ensured not to be put in harm's way as the company took extra safety measures to prevent any potential infection or other outbreak. 

Resuming business in the Huawei factories should represent no health hazard theoretically since the factory is located in the Guangdong province in the south. However, many are having some serious concerns regarding the health of the workers who would have to commute daily to and from work under such uncertain circumstances. At this point, Huawei's operations to manufacture everything from mobile parts to consumer devices are up and running. However, the question remains, will anyone be willing to buy devices that were manufactured in such an extreme and questionable environment? This will appear clearly in the Huawei quarter sales numbers!

 

The coronavirus impact on the Indian mobile market

Another mobile phone industry that is going to be severely affected by the outbreak of the coronavirus and its outbreaks in China, is India. This may come to a surprise for many people, but as the second-largest smartphone manufacturing country after China itself, India greatly depends on China in terms of mobile phone parts supplies such as camera modules and display panels to name a few. With almost every factory in China suspending its manufacturing operations, the manufacturing process in India can become paralyzed very soon. This stand-still in the mobile production process in the two biggest mobile maker countries will ultimately affect the mobile market in the entire world!

If the image is still not clear as to how grave the danger here, it will be after you know that Indian companies and factories manufacture either complete handsets or vital parts in mobiles of brands such as Apple, Samsung, OnePlus, and Xiaomi. With the operations suspended in China as the source for India to kick off its manufacturing processes, all mobile brands will be soon feeling the impact of the coronavirus on their manufacturing and, therefore, sales numbers this quarter and the next one.

For now, Indian mobile manufacturers are able to deal with the crisis thanks to the Lunar New Year holidays that helped them stock up on parts that they import from China. This way, they kind of anticipated the problem and took measures to prevent any delay in production. Yet, if the coronavirus outbreak spreads more or continues for a longer period of time and reaches March, for instance, the Indian mobile production will start facing serious problems.

If things get this far, Indian mobile producers will have to resort to importing the needed parts from alternate markets such as Vietnam, South Korea, and Taiwan. However, even this solution won't be perfect as it will most likely force the Indian mobile manufacturers to make certain changes to the mobiles' build, design, and even software. So, the hard choice here will be essential to either lose by not making the expected mobiles, or to do some alterations and manufacture mobiles which will be a little, or much more, different in specs and, potentially, quality.

After China got rid of SARS, the lethal virus that hit the country almost 17 years ago, China, and the world are now facing a much more dangerous virus that is spreading faster than wildfires! The coronavirus is threatening billions of lives not only in the sense of infection but also in the sense of gravely affecting the Chinese economy to a point where the people will no longer be able to work and earn their living as time goes by.

Most Chinese families had to stay at home upon orders from the government to try to stop the coronavirus from spreading further. Work has been suspended not only in Chinese companies and factories, but also in American and other international companies that have prevented its employees and workers from traveling to China and shut down all of its China-related operations such as Apple, Amazon, Tesla, and more.

Although the WHO doesn't recommend any company or business entity to take any unnecessary measures that can disrupt the international trade or traveling movement, Major international airline, entertainment, and tech companies are suspending their operations in China causing the country to lose over $60 billion this quarter alone!

Some would think that these companies are overreacting; however, when checking the numbers, we found out that the coronavirus victims have exceeded in one month what the SARS virus has hit in a 9-month period by 11,000 souls!

 

How much is the coronavirus costing China & the world? 

The economic effect stemming from the coronavirus leading to local and international factories shutting down all over the country will extend into the future even after the virus is gone as the government will have to decrease the taxes and lower the interest rates as well as increase the spending in order to preserve the economy from collapsing due to the coronavirus outbreak.

Considering that, last year, the Chinese economy was already at its weakest points in the past 30 years, it is expected for the country to witness a huge rise in debt and to, most definitely, lose its economic competition that it went through with the United State for decades.

Chinese government and banks have already started their measure to contain the economic losses from the coronavirus outbreak by lowering the interest rates especially for individuals and small businesses that are located in the most affected areas by the virus such as Wuhan. The Bank of China has granted all of the Hubei province residents the opportunity to delay the payments on any loans for months since the coronavirus has forced them to leave and, potentially, permanently lose their jobs.

 

Factories & stores shutting down all over China 

Cities like Wuhan, where the first to witness the coronavirus outbreaks, have become almost completely deserted with people confined within their homes, had witnessed factories and stores shutting down entirely. Megastores like Ikea, Starbucks, and Apple Stores have closed their doors with no hope to reopen them anytime soon. Stores that did not decide to close, such as Nike, McDonald's, and Under Armour are losing magnificently in sales because the malls where these stores are located are becoming deserted with no visitors. Losing sales at such a rapid pace will eventually lead these stores to close as well to avoid any additional losses. 

While the government has extended the Lunar New Year's holidays in hopes that by the time the holidays are over, the coronavirus would be contained and dealt with, automotive companies such as Toyota and General Motors are holding off production waiting for their employees to return.

This situation was further intensified with multiple airlines such as United, Delta, and British Airways suspending flights to and from China.

 

Chinese Huawei factories are still up & running! 

While other mobile and tech giants such as Apple & Amazon and even Walmart that rely on Chinese workers and customers alike are taking a direct hit by losing a huge market share in China as they proceeded to suspend all of their operations in China, some Chinese companies are still up and running like Huawei!

After the extended Chinese New Year holidays, Huawei has reopened and continued its manufacturing process on the first Monday of February. To ensure that everything is fine and no risks are being taken in terms of the employees' health, all employees have been tested and confirmed to have no infections. They were also ensured not to be put in harm's way as the company took extra safety measures to prevent any potential infection or other outbreak. 

Resuming business in the Huawei factories should represent no health hazard theoretically since the factory is located in the Guangdong province in the south. However, many are having some serious concerns regarding the health of the workers who would have to commute daily to and from work under such uncertain circumstances. At this point, Huawei's operations to manufacture everything from mobile parts to consumer devices are up and running. However, the question remains, will anyone be willing to buy devices that were manufactured in such an extreme and questionable environment? This will appear clearly in the Huawei quarter sales numbers!

 

The coronavirus impact on the Indian mobile market 

Another mobile phone industry that is going to be severely affected by the outbreak of the coronavirus and its outbreaks in China, is India. This may come to a surprise for many people, but as the second-largest smartphone manufacturing country after China itself, India greatly depends on China in terms of mobile phone parts supplies such as camera modules and display panels to name a few. With almost every factory in China suspending its manufacturing operations, the manufacturing process in India can become paralyzed very soon. This stand-still in the mobile production process in the two biggest mobile maker countries will ultimately affect the mobile market in the entire world!

If the image is still not clear as to how grave the danger here, it will be after you know that Indian companies and factories manufacture either complete handsets or vital parts in mobiles of brands such as Apple, Samsung, OnePlus, and Xiaomi. With the operations suspended in China as the source for India to kick off its manufacturing processes, all mobile brands will be soon feeling the impact of the coronavirus on their manufacturing and, therefore, sales numbers this quarter and the next one.

For now, Indian mobile manufacturers are able to deal with the crisis thanks to the Lunar New Year holidays that helped them stock up on parts that they import from China. This way, they kind of anticipated the problem and took measures to prevent any delay in production. Yet, if the coronavirus outbreak spreads more or continues for a longer period of time and reaches March, for instance, the Indian mobile production will start facing serious problems.

If things get this far, Indian mobile producers will have to resort to importing the needed parts from alternate markets such as Vietnam, South Korea, and Taiwan. However, even this solution won't be perfect as it will most likely force the Indian mobile manufacturers to make certain changes to the mobiles' build, design, and even software. So, the hard choice here will be essential to either lose by not making the expected mobiles, or to do some alterations and manufacture mobiles which will be a little, or much more, different in specs and, potentially, quality.

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