The outbreak of the COVID-19 coronavirus is beginning to impact supply lines and the telecoms industry is no exception.
A look at the Dow Jones Industrial Average today shows the serious impact coronavirus is already having on the stock market in general:
While many will point to other factors making a pullback from such high valuations inevitable, it seems coronavirus may be the catalyst as investors get concerned about the impact of the virus on supply chains, travel, and more.
The tech industry is particularly susceptible to coronavirus due to many parts being made in China, the centre of the outbreak.
Apple’s next iPhone, for example, is expected to face supply problems if the situation in China worsens due to production slowdowns at manufacturer Foxconn. This is in addition to potential travel restrictions limiting the company’s engineers flying to Asia to oversee production.
One of the iPhone’s biggest new features will almost certainly be 5G support. However, coronavirus may well mean that fewer 5G networks are available for it to be used on anyway.
Omdia’s analysts said: “With the epidemic arriving at the dawn of 5G’s mainstream deployment phase, the coronavirus has the potential to disrupt the progress of the next-generation wireless standard, as the crisis slows or threatens to slow the production of key smartphone components, including displays and semiconductors.”
“We believe that China will take a significant position in the 5G era in both supply and demand of devices and network-wise,” Omdia analyst Jusy Hong said in an email interview with MarketWatch.
Chip manufacturers like Samsung have already announced they are cutting production. While it’s faced increasing scrutiny outside of China, Huawei is still the world’s largest telecoms vendor. Even industry events where products are announced and partnerships formed, like MWC, are being cancelled to help limit the spread of the virus.
While China is one of the most important countries for the global economy, we’re somewhat fortunate that coronavirus is yet to become a full-on pandemic with only relatively isolated cases outside of China. If it spreads much further, the fallout is going to be a lot worse.
But for some amusement in these dark times, here’s a post from an anti-5G conspiracy group: “I’ve heard it’s not a serious ‘Virus,’ it’s about as bad as a flu or cold. So really this is a perfect plan to cover up EMF/5G related illnesses.”
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