Michael Crider
In a little less than two weeks, Review Geek was going to attend Mobile World Congress in Barcelona. It’s one of the highlights of the year in terms of tech shows, a showcase for all the phones coming up in the summer. But as of Monday, we’re not going because neither are significant players like LG, Amazon, Sony, and NVIDIA.
Update, 2-12-2020: The GSMA has cancelled Mobile World Congress altogether. It won’t be happening at all this year.
Health Scares at MWC
Other companies with a diminished presence at MWC, like canceled press conferences or booths, include TCL, Ericsson, and ZTE. That’s the list as of Monday afternoon, and it’s likely to grow longer. In case you haven’t heard, this is due to health problems from the Wuhan coronavirus. Such things are usually outside of our news coverage area, but in this case, it’s going to directly affect tech hardware in the short term, at the very least.
The industry body that puts on Mobile World Congress, the GSMA, is putting in extra precautions for attendees. Attendees from the Hubai province (where the outbreak began) will not be permitted at the show, travelers who’ve recently been to China will have to demonstrate that they’ve been outside of China (and symptom-free) for at least two weeks, and additional temperature screenings will be put in place.
Between legitimate fears of a virulent sickness and the incredibly dense human traffic of a huge conference (there were over 100,000 attendees last year), it’s easy to see why companies and media outlets are pulling out. At the moment, even unnecessary international air travel seems inadvisable. Keep in mind that a huge number of attendees and exhibitors would be flying in from North America, Asia, and all over Europe.
But attendance issues at Mobile World Congress are just the tip of the iceberg. Coronavirus is causing potentially global problems with product manufacturing, too.
Big Trouble in Not-So-Little Factories
The coronavirus is a serious humanitarian crisis, and we have no wish to trivialize it. People are sick, and people are dying. That’s bad, and it’s much more important than anything we usually talk about on Review Geek.
But it’s worth pointing out that its impact is already being felt far beyond the medical and travel fields. With the vast majority of most tech’s manufacturing power centered in mainland China, a sickness disrupting the daily life of the streets of Shenzhen is going to disrupt business up and down the tech industry, and many others.
Mainland China’s manufacturing centers are incredibly huge campuses, with some of them holding thousands of workers going in and out in multiple shifts every day. They are, like a crowded convention center, a terrible place to be in the middle of an outbreak.
Factories across China are staying closed for extra time after the usual lunar New Year’s festivities. Foxconn, which manufactures Apple’s iPhones, among many other tech industry clients, is only opening in a limited capacity this week. Workers returning from hard-hit areas are facing a two-week quarantine and health screenings after their holidays. Nintendo is already warning retailers that the coronavirus will cause inevitable production delays for the Switch game console and accessories.
You can expect similar problems at a huge portion of factories in China. And with no immediate end in sight for the spread of the coronavirus worldwide, things are likely to get worse before they get better.
Domino Effect
The problem is more complicated than it might seem at first. Sure, the phones, tablets, game consoles, and computers being made right now might be delayed. But in addition to finished electronics, China’s factories also supply business-to-business parts, both to each other and the portion of the tech manufacturing world outside of China.
Hubs in South Korea, Japan, Taiwan, and India, while not currently suffering from shutdowns or worker shortages, are facing supply chain issues that could immediately slow their output. It’s not just consumer technology, of course: auto, textiles, hardware, simple plastics, and other home items, industrial equipment, even raw materials like steel and organic chemicals, are all in danger of being delayed or otherwise hindered as Chinese workers stay home for the sake of their health.
Factory workers in Jiangxi manufacture circuit boards in an assembly line. Humphery/Shutterstock.com
With the super-tight margins and scheduling of modern manufacturing, even a few weeks of slowed output in China will cause big headaches for producing almost anything on a large scale. And the longer the problem persists, the more dramatic the effects will be at both the business and consumer levels.
So, expect lower-than-usual stock for tech hardware, and lots of other things, into the summer at very least. For example, phone manufacturers should be putting the final design touches on their fall releases right now, with testing happening over the spring and summer, and initial manufacturing starting around July and August. With manufacturing centers hard hit, the initial prototypes will already be delayed.
What Won’t be Affected?
But what about the other tech-related stuff that you use? What won’t be affected by a probably hit to China’s manufacturing power? The simple answer is, “most of the things that aren’t actually manufactured.”
The big one here is software. Updates to Windows, macOS, iOS, and Android should continue more or less uninterrupted since development centers in the US and Europe haven’t been affected. (Yet.) Ditto for video games (at least downloaded versions), since China’s huge development scene is mostly focused on its domestic market. Technology services, such varied things as Netflix, Dropbox, Fitbit, etc. should continue to operate as usual.
But anything connected to hardware that you need to buy is going to see a hit. Be prepared for the delays and the shortages, and try to be patient. I like to assume that everyone’s doing the best they can in a scary and frustrating situation.
