Coronavirus takes a toll on cell phone production

Coronavirus takes a toll on cell phone production

The extended lockdown of component factories in China due to the coronavirus outbreak has sent the local smartphone manufacturers into a tizzy as the absence of supplies from China may affect domestic production. According to the industry experts, market leader Xiaomi is expecting component prices to rise as supplies have started getting affected. Further, the stocks of Apple iPhone 11and 11Pro models (which are imported) are beginning to dwindle.

Smartphone sales are likely to fall 10-15% in the January-March quarter, according to experts. This situation is likely to worsen during the April-June period and delay product launches by four to five week delays.

“While we are working to explore alternative supply channels for components and raw materials, the immediate impact is that the short supply might cause some negative pressure on the prices of these components,” a Xiaomi spokesperson added.

China plays an integral part in the supply chain: while battery and some camera modules are made in Vietnam, displays and connectors are majorly made in China. Further, Taiwan-made chips are sent to China for the final build-up; and China is a leading exporter of key printed circuit board (PCB) component.