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COVID-19 puts consumer electronics at mercy of supply chains

Dampened demand worldwide will likely have long-term effect on OEMs, says GlobalData


The coronavirus (COVID-19) is by far the most significant theme to affect the technology industry in 2020, putting incredible strain on the world economy, and could effectively halt it for three months or more, according to a recent report produced by GlobalData, a leading data and analytics company. 

The report indicates that many companies will not survive this initial phase, while almost all others will suffer significant drop in revenues. The report’s analysis provides insight into the impact of COVID-19 on leading companies, as well as the impact of COVID-19 across 17 different technology sectors. It discusses the short- and long-term impacts of COVID-19 on each sector, and ranks on a company-by-company basis the individual impact of COVID-19 alongside nine other themes that affect that sector. All sectors will be negatively impacted, the report shows.

Supply chains were disrupted

“Consumer electronics firms’ supply chains rely on Chinese components. As China, the source of the COVID-19 outbreak, slowed down and then stopped, supply chains were disrupted,” says David Bicknell, principal analyst at GlobalData. “Apple is one of those that suffered, with more than 90% of its products made in China – and 18% of its revenues generated there.” Apple’s ranking in GlobalData’s consumer electronics thematic scorecard tumbling from number four to 14th.

“The economic contagion caused by COVID-19 will affect general consumer confidence and dampen demand for electronics until the health outlook looks brighter. However, there are some bright spots in the gloom,” Bicknell says. “Drones are now being used on the front line in China, Spain and the US to deliver medical supplies and to chastise loitering citizens to get indoors and self-isolate. Moreover, 3D printing is coming to the rescue for hospitals urgently needing spare parts for respirators. Eventually, when life has returned to normal and consumers have the confidence to spend, there will be increased spending on devices.”