MWC, the annual industry event, was finally canceled after a long struggle among handset makers. Staff who had earlier announced their insistence on exhibiting and had been quarantined in Spain for several days also had to return. While avoiding the risk of crowding, this is not good news for handset makers: not only are they facing the cost of exhibiting and the cost of the show, but the original product launch plan has also been disrupted, which will undoubtedly have a negative impact on subsequent product sales.
This is just one of the dilemmas facing the mobile phone industry in the new corona pneumonia outbreak. New product capacity will face significant challenges due to delays in supply chain and manufacturing plants, and off-line channel traffic will decline sharply for the sales side. All of these bring many variables to the year of the popularity of 5G phones in 2020.
MWC cancels release to live online
Xiao Li (pseudonym) is a media practitioner, after the Spring Festival plan is to follow the manufacturers to Spain to hold the MWC exhibition, but the outbreak of new crown pneumonia upset everything. During the Spring Festival holiday, the number of confirmed cases in China has been rising, and many countries have also begun to experience infectioncases. Based on security considerations, LG, ZTE, TCL, vivo and other manufacturers have announced their withdrawal from MWC. At this time he began to worry about the business trip can still be done, but he followed the manufacturers to take into account the early publicity, exhibition material input, product release plan, etc. , continue to adhere to the exhibition.
MWC organizers are also struggling. It was first announced that it would be held as scheduled and a series of measures were announced, including a ban on participants from Hubei, China, and a 14-day certificate of departure from China, but the official decision to cancel the conference after a number of well-known technology companies announced their withdrawal.
For the author, the biggest impact may be travel planning. But for mobile phone companies, the reach is broader. As the mobile phone industry’s annual event, domestic mobile phone manufacturers have high hopes for it. Huawei had planned to release its latest generation of folding phones, Mate Xs, while OPPO plans to unveil its flagship Find X2 of the year, with vivo planning to showcase the latest APEX concept machines. With the cancellation of MWC, these vendors’ product release plans will need to be recalibrated, including time, location, employee travel, and more.
One manufacturer said that although it had been isolated in Spain for nearly a week, it had to return with the official cancellation of the conference. The organizers have not made a clear statement about the fees paid for the exhibition. In fact, the outbreak of new crown pneumonia affects not only overseas distribution plans, mobile phone manufacturers domestic product release rhythm has also been disrupted. Due to the insecurity of the gathering of personnel, many manufacturers announced that the product launch will be changed from offline to live online.
On February 8, Xiaomi announced that it would launch its flagship Xiaomi 10 series at 2 p.m. on February 13. Xiaomi Chairman and CEO Lei Jun bluntly said “this is a difficult decision”, Xiaomi vice president, China President Lu Weibing also said that the planned offline 3000 people large-scale launch will be changed to pure live broadcast release, an annual flagship is very, very challenging. The team needs to make big adjustments.
People familiar with the situation said that because of the impact of the outbreak, xiaomi in the Spring Festival before the discussion whether to use the form of online release, but there are always concerns. For example, how do ordinary consumers reach this launch? How receptive are they to online postings? How to grasp the rhythm of a speech without an audience or the media?
But as more handset makers join the live-streaming launch, they are also gradually dispelling their concerns. On February 12, vivo also announced that iQOO 3 would be released online on February 25. iQOO mobile phone product line general manager Zeng Kunpeng also admitted on Weibo, this release coincides with the outbreak, in order to team safety to live online, but it is not easy, now travel, equipment mobilization, teamwork are no small challenge. In addition, it has been reported that companies such as Glory are also considering a live online launch of new products.
Re-work postpones production capacity and channels to meet the exam
The mobile phone industry includes upstream supply chains, midstream mobile phone manufacturers and downstream channel providers. The outbreak affected not only mobile phone manufacturers, but also upstream suppliers and downstream channel providers.
On January 27, the State Council announced the extension of the 2020 Spring Festival holiday to February 2, February 3, and then, on the basis of the State Council’s notification, Shanghai, Henan, Guangdong and other places announced that all enterprises except the necessary industries will resume work after the 15th Lantern Festival, the earliest time after February 9 thing; Many cities also require that migrant workers be isolated for 14 days.
The 14-day ban on extended holidays and self-isolation is a significant challenge for the upstream supply chain to resume production. Take Foxconn, a mobile phone factory, which reported that Ithashasin had promised to start on February 10, but that day the factory had only 10 percent of its workforce. Zhengzhou Foxconn will be quarantined for 14 days for workers returning from outside Henan province, and for workers returning from Henan province for seven days.
A notice posted by a Shenzhen Foxconn employee shows that employees who have been in Shenzhen need to confirm the trajectory and physical condition of their activities in Shenzhen for nearly 14 days, and that they can enter the plant with the consent of the top epidemic prevention official, and may not enter the factory without being able to bring in new personnel; rework.
Many Foxconn employees on the social platform, has not yet received the notice of resumption of work, “on the point is to give a quasi-letter ah”, “when can go to work ah lying down enough!” “OPPO Vice President Shen Yiren admitted on Weibo that this wave of outbreaks will certainly have a significant impact on the production capacity of this wave of flagship machines, the early supply will be more tight, because the supply chain of a ring (even the box) capacity will be affected by the production capacity of the entire machine will be affected.”
Not only the supply chain production link, mobile phone manufacturers online sales are also facing serious challenges. Zeng Kunpeng, general manager of iQOO mobile phone product line, said that the crowd gathering and people-to-people contact industry will be greatly affected by the outbreak, such as catering, entertainment, shopping malls and other industries are particularly obvious. It also includes the mobile phone industry, which is also retail in essence.
Apple, for example, announced on its website on February 1st that it would temporarily close retail stores in mainland China from now until February 9th, and on February 8th, Apple said it was working to reopen its offices and contact centers in the week of February 10th, and was preparing for the reopening of the retail stores, but did not provide a specific opening date. Only a few Chinese retail stores have opened.
Recently in Beijing visited Huawei, Xiaomi and other manufacturers of off-line stores found that, first, the store is located in the shopping mall passenger flow significantly reduced, store passenger flow is very few, with the normal period of the pre-festival passenger flow in sharp contrast;
First quarter shipments will decline by more than 30%?
Market research firm Strategy analytics said in a report that 70 percent of the world’s smartphones are made in China, and the outbreak will affect the supply chain and manufacturing capacity of smartphones around the world. Delays in the start of a plant due to isolation or travel restrictions will inevitably lead to temporary labour shortages. According to the report, the new coronavirus is facing serious challenges for leading Chinese manufacturers such as Huawei, OPPO, Vivo and Xiaomi.
Strategy Analytics expects HuamiOV to be at risk of falling demand in China’s domestic market in the first half of 2020, while expansion in overseas markets will also be affected by capacity and travel bans. International brands such as Apple are also at risk of running low capacity and falling demand in China.
IDC, another research firm, expects the overall domestic market to fall by about 40 per cent year-on-year in January-February as a result of the outbreak. In March, if the outbreak is stabilized, the overall market will gradually enter a recovery period, but it will still be difficult to recover to the level of the same period last year. Throughout the first quarter, the domestic market is expected to suffer a year-on-year decline of more than 30%.
Xiaomi chairman Lei Jun in the 13th press conference interview also took this view, he said that the first quarter of this year will be a sharp decline in domestic mobile phone sales, but he is optimistic about the second and third quarters, think there will be a retaliatory rebound. The impact of the outbreak on the industry as a whole will not be as great as expected.
Handset makers are also trying to reduce the impact of the outbreak. Huawei’s offline dealers say the company is increasing its online sales training for dealers and even trying to sell in friends’ circles, live streams, and more. While online traffic is decreasing, expand online business to mitigate the impact of the outbreak.
Xiaomi Vice President Lu Weibing admitted in an interview, the current Xiaomi line stores only opened 20%-30%, so Xiaomi 10 sales channels will temporarily be mainly online. Lei Jun also believes that although the outbreak on the offline channels have brought an impact, but the Electric Chamber of Commerce is a huge boost, he also called on consumers from the small rice mall, JD.com and other online channels to buy Xiaomi 10. After several years of declining domestic capacity, handset makers had expected an outbreak of 5G handsets in 2020, but suffered from the black swan of new crown pneumonia.
There is no doubt that domestic mobile phone sales in the first quarter of this year will be greatly affected by the outbreak, the entire mobile phone industry will usher in a period of difficult times. But as Lei Jun said, “Life can be affected by the outbreak, but we must not be defeated by the outbreak.” “In the upstream industrial chain, mobile phone manufacturers, channel providers and many other enterprises under the self-help, expect the mobile phone industry will usher in a “retaliatory rebound” after the outbreak.