The coronavirus has effectively shut down public movement in wide parts of China, killed at least 1,873 people, and infected more than 45,000. It has also put the world’s iPhone supply and online retailers like behemoth Alibaba at risk as chip and hardware manufacturing and supply chains have taken a hit and over 150 million Chinese remain under lockdown.
According to market research company Trendforce’s latest report, released Monday, February 17, coronavirus could lead cause a huge drop in the overall supply of tech products around the world. The company predicted that about 16% fewer smartwatches will ship from China, along with 10% fewer smartphones, 12% fewer notebooks, 5% fewer TVs and 8% fewer cars.
Trendforce predicts that companies that stockpiled ahead of the Lunar New Year should be able to operate normally if customs can be cleared in a timely manner. It also noted products like flash memory cards and lithium ion batteries will be largely unaffected since the materials used and the regions where manufacturing are concentrated are not as badly affected by lockdowns as other areas.
Coupled with the Lunar New Year shutdown, the threat of the virus has caused Apple to issue a statement about labor shortages at one plant: “While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated. The health and well-being of every person who helps make these products possible is our paramount priority … These iPhone supply shortages will temporarily affect revenues worldwide.”
Alibaba is responsible for two-thirds of all online commerce in China and CEO Michael Zhang said in a statement the precautionary measures taken to prevent person-to-person spread of the disease “may potentially affect the global economy.”
While it may make sense that online retailers could benefit from a public that is scared to travel to brick and mortar establishments, it’s the inventory of those online retailers, like Alibaba, that is at risk, Diginomica reported.
Auto manufacturers like Jaguar Land Rover may have to cut production in two weeks after limited numbers of parts have had to be flown in to support production.
Looking at it from the buyer’s perspective, if you want to buy a new laptop or LCD television, it might be best to wait for when the threat of the virus dissipates so that demand does not greatly outpace supply.
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