Why Coronavirus Outbreak Is Giving Jitters To India's Smartphone Industry

The Indian smartphone industry, which relies heavily on China for components and sub-assemblies, has started feeling the impact of supply disruptions in certain product categories due to the coronavirus outbreak, market watchers said on Tuesday. The industry is keeping a close watch to see if shuttered factories in China reopen in the coming days and supplies resume sometime this week. "Yes, the industry is already feeling the impact and some products and models have been impacted. It is still early to draw any conclusion as select factories are slated to resume production in a phased manner," India Cellular and Electronics Association (ICEA) Chairman Pankaj Mohindroo told PTI.

He declined to comment on the specifics, but added, "we are in a wait-and-watch mode this entire week." Industry watchers, however, admitted that the situation on the ground is bad, as the supply lines for smartphones predominantly come from China. At the same time, they said the market itself is slow and demand sluggish.

When contacted, Realme in an e-mailed response said its supply chain has not been affected for the time being and that "there has been no significant effect in stocks/production for Realme in India" during the said period. "All Realme smartphones sold in India are manufactured in India, with more than 7500 local workforce and more than 50 per cent local supplies...Due to objective reasons such as logistics obstruction and delay in resumption of work caused by the epidemic, some supplies from China might face slight delays but no major impact as of now is there for our future product plans," it added.

The company said it is closely monitoring the impact on the smartphone industry. E-mail queries sent to Xiaomi, Oppo, Vivo and POCO on the impact on supplies went unanswered.

Meanwhile, reports suggest that one of the large contract manufacturers and component suppliers has resumed operations in one of its plants in China, but is operating with only a small fraction of its workforce.

The death toll in China's novel coronavirus outbreak has gone up to 1,016 with 108 new fatalities reported mostly in the worst-affected Hubei province, while the confirmed cases of infection have soared to 42,638.

Outside China, there have been more than 350 infections reported in almost 30 places with two deaths, one in the Philippines and the other in Hong Kong. The coronavirus outbreak and its perceived risk has cast a shadow on the upcoming Mobile World Congress (MWC), the largest mobile event and the industry's flagship annual congregation.

So far, heavyweights like Ericsson, Amazon, Sony and others have said they are withdrawing from the event that is scheduled to take place in Barcelona from February 24-27. On Tuesday, Vivo said in a statement that it has been closely monitoring the coronavirus outbreak and has "decided to withdraw" from its debut at MWC 2020 and other related events later this month in Barcelona, Spain.

"The health and safety of our employees and the public are our top priority...We will soon introduce the APEX 2020 concept phone which we had originally planned to showcase at MWC. We will share more updates in due course," the Vivo statement said.