Spread of the novel Coronavirus has not just impacted trade across Asia, but has also rattled handset makers in India as the shutdown in China threatens to disrupt their supply lines for components and spare parts. It is learnt that some Chinese companies are in process of re-scheduling smartphone launch dates for this month.
However, analysts and market insiders said the situation is not very alarming at the moment in terms of availability of mobile phones or components as handset makers have some inventory left from the previous quarter. Besides, companies were well-stocked on inventory anticipating the Chinese new year holidays. However, the supply could dwindle if the contagion persists beyond a month.
Sources said Oppo and Vivo are in process of re-scheduling smartphone launches planned in February as a precautionary measure and some more firms might follow suit. When contacted, Vivo India’s director (brand strategy) Nipun Maria said, “The management will be following the advisory provided by respective governments (India and China) .”
Counterpoint Research associate director Tarun Pathak told FE, “Chinese firms in India are likely to be impacted. There is a good chance of the situation remaining critical for the next four-five weeks before subsiding in March. This impact can be in form of delay of new launches due to supply chain disruption. Additionally, the ban on travel will also impact new product planning and development, as factories will not function properly.” He explained that components sourced from China will also take a hit. The lack of workforce, which is now working remotely in China, can also impact logistics.
TechARC founder Faisal Kawoosa said, “Smartphone brands can neither import phones nor components, which means domestic assembly is also challenged.” IDC India associate research manager (client devices) Upasana Joshi said if the current virus outbreak persists, it will impact supply chain in coming months. When asked about an alternative for sourcing components, Pathak said realigning supply chain is not easy.
