India’s smartphone sector, the second-largest in the world, could be headed to a supply-chain disruption as a result of the coronavirus epidemic. Chinese smartphone makers, it is learnt, could be severely impacted if the situation triggered by the spread of COVID-19 does not improve.
“Smartphone vendors will feel the impact and new launches will get delayed till mid Q2,” explained Navkendar Singh, Research Director, Client Devices & IPDS, at IDC India. “Component stocks will also feel impact due to logistics issues till mid Q2.”
Even though most Chinese companies such as Xiaomi, Vivo and Oppo assemble smartphones in India, they heavily rely on China for many of the key components like battery and sensors. The delay in sourcing electronic components from China means supply chain disruptions, leading to a delay in manufacturing and launches.
Xiaomi India told the extended shutdown in China will likely have an impact on the company’s supply chain and “overall quantum of component supplies” is under risk.
A Xiaomi India spokesperson told indianexpress.com that the extended shutdown in China will likely have an impact on the company’s supply chain and “overall quantum of component supplies” is under risk. Xiaomi, India’s largest smartphone vendor, admits that several components and raw materials are in short supply and this has put a “negative pressure” on their prices.
As a result, the company had to increase the price of the Redmi Note 8 (4GB + 64GB) variant in India. However, Xiaomi assured that the price rise is temporary and the company is trying to explore alternative supply channels for components and raw materials.
The mobile handsets and electronics industry body, India Cellular and Electronics Association (ICEA), is monitoring the situation closely. “The coming weeks are crucial for the smartphone industry and if factories do not resume then there could be an impact on the manufacturing of mobile phones in India as vendors are heavily dependent on the Chinese supply chain ecosystem,” said Pankaj Mohindroo, ICEA chairman. Mohindroo said the prices of smartphones might see a marginal increase for some “scattered categories”.
In Pics: Coronavirus (COVID-19) outbreak around the world
Slovakia's Prime Minister Peter Pellegrini attends a news conference during the summit of the Visegrad Group (V4) countries to discuss response to the spread of the coronavirus, in Prague, Czech Republic, on March 4.
U.S. Vice President Mike Pence gives a news briefing about the coronavirus with members of the White House Coronavirus Task Force at the White House in Washington, D.C., U.S., on March 3.
The U.S. White House coronavirus response coordinator Dr. Deborah L. Birx attends a press briefing, as Vice President Mike Pence looks on, in the White House on March 2. As of March 3, six people had died in the state and at least 100 confirmed cases were reported across the country.
Government officials make phone calls to members of the Shincheonji Church of Jesus to check if they have symptoms of COVID-19, at the Goyang City Hall in South Korea on March 3. The country confirmed its 29th death and more than 4,800 cases of the virus infection on March 3.
A Brazilian scientists, who is among those that concluded coronavirus DNA sequencing, inserts a tube into a portable device connected to a computer that decodes virus DNA, at the Tropical Medicine Institute of the São Paulo University Medical School in Brazil on March 2.
Rescue workers wearing masks and protective clothing check a man's temperature during a mock drill on handling suspected carriers of the coronavirus, in Peshawar, Pakistan, on March 2.
Students of Hanoi National University of Education attend the first day of classes after returning to the university, which was closed for over a month due to the coronavirus outbreak, in Hanoi, Vietnam, on March 2.
U.S. President Donald Trump speaks during a news conference on the coronavirus outbreak as (L-R) U.S. Secretary of Health and Human Services Alex Azar, National Institute of Allergy and Infectious Diseases Director Anthony Fauci, U.S. Vice President Mike Pence, Director of the Centers for Disease Control and Prevention Robert Redfield and U.S. Surgeon General Jerome Adams look on, at the White House on Feb. 29.
A cleaner sanitizes a wagon on a regional train at the Garibaldi train station in Milan, Italy, on Feb. 28. Authorities are taking new measures against the COVID-19 outbreak as death toll in the country reached 21 on Feb. 29.
A researcher works in a lab that is developing testing for the COVID-19 at the Hackensack Meridian Health Center for Discovery and Innovation in Nutley, New Jersey, U.S., on Feb 28. The facility develops novel therapies for some of the worlds most difficult diseases.
U.S. Vice President Mike Pence speaks next to Health and Human Services Secretary, Alex Azar, during a coronavirus task force meeting at the Department of Health and Human Services in Washington, D.C., U.S., on Feb. 27.
A man wearing a face mask walks past an installation of the Olympic rings in Tokyo, Japan, on Feb. 28. The International Olympic Committee is "committed" to holding the 2020 games in Tokyo as planned despite the widening coronavirus outbreak, the body's president has pledged.
Umrah pilgrims are seen after the cancellation of the departure to Mecca following the Saudi government's temporary ban announced on Feb. 27, to keep the country safe from the virus outbreak, at Soekarno Hatta International Airport, in Jakarta, Indonesia, on Feb. 27.
A resident of Jongno-Gu district wearing a face mask sprays disinfectant as a precaution against the coronavirus at the Jogyesa Buddhist temple in Seoul, on Feb. 27.
School staff leave after the government announced a 14-day closure as they found a eight-year old student was infected with the virus, at Phraharuthai Donmuang School in Bangkok, Thailand, on Feb. 26.
South Korean President Moon Jae-in talks during a special government meeting to discuss measures to prevent the further spread of COVID-19, at the Daegu City Hall in Daegu on Feb. 25.
Fans wear masks at Stadio San Paolo in Naples, Italy, on Feb. 25, prior to the UEFA Champions League round of 16 first leg match between SSC Napoli and FC Barcelona.
Members of the Guardia di Finanza wearing face masks stop a car, amid a coronavirus outbreak in northern Italy, in Casalpusterlengo, Italy, on Feb. 24.
A reveler wears protective face mask at the Venice Carnival, the last days of which were called off after third death was reported in the country, in Italy on Feb. 23.
Buddhist monks wearing protective face masks pray during a blessing ceremony for the people affected by the COVID-19 outbreak, at a temple in Kuala Lumpur, Malaysia, on Feb. 22.
Members of Red Cross board a Colombian Air Force plane that will evacuate the citizens from coronavirus-hit China, at the CATAM military base in Bogota, Colombia, on Feb. 22.
French Economy and Finance Minister Bruno Le Maire speaks next to the Junior Minister for Economy and Finance Agnès Pannier-Runacher during a press conference after a meeting on the coronavirus' economic consequences, at the Economy Ministry in Paris, France, on Feb. 21.
A medical worker checks the temperature of a man wearing a protective mask at a quarantine checkpoint in the Son Loi commune in Vinh Phuc Province, Vietnam, on Feb. 20.
A Chinese tourist, who was tested positive for the COVID-19 coronavirus and isolated for treatment, gestures while accompanied by medical staff after she was discharged from the hospital following her recovery, near Colombo in Sri Lanka, on Feb. 19.
Passengers wearing protective facemasks amid concerns of the COVID-19 coronavirus outbreak wait to board their plane at Kuala Lumpur International Airport in Malaysia on Feb. 19.
Media personnel chase after a passenger (C) who disembarked from the Diamond Princess cruise ship at the Daikoku Pier Cruise Terminal in Yokohama, on Feb. 19.
Indians who were airlifted from Wuhan wait to collect their release certificates before leaving the ITBP quarantine facility in New Delhi, India, on Feb. 17.
Military medics stand in a formation after deplaning from a transport aircraft of the People's Liberation Army Air Force (PLAAF) at the Tianhe International Airport in Wuhan, China, on Feb. 17.
Pictures of Pakistani students studying in Wuhan, China, are displayed by their family members during a demonstration in Lahore, Pakistan, on Feb. 16. The family members are demanding the evacuation of their relatives.
A U.S. passenger gives a thumbs up to reporters while arriving at the Haneda Airport in Tokyo, Japan, on Feb. 17, after disembarking in Yokohama from the Diamond Princess cruise ship.
Nepalese nationals who were in Wuhan walk out from a Nepal Airlines plane at Tribhuvan International Airport in Kathmandu, on Feb. 16. The chartered plane brought back 175 nationals from Hubei province.
A woman is seen wearing a protective mask as she holds a rose on Valentine's Day, while waiting for the subway at a station during rush hour in Beijing, on Feb. 14.
Passengers and children stand on the deck of the cruise ship Diamond Princess, as the vessel's passengers continue to be tested for coronavirus (COVID-19), at Daikoku Pier Cruise Terminal in Yokohama, Japan, on Feb. 13. Aboard this quarantined ship, 219 people have tested positive with the virus.
Family members of Pakistani students studying in Wuhan, rally outside the Chinese Consulate in Lahore, Pakistan, on Feb. 13., for the evacuation of their children from the Chinese city.
Cambodia's Prime Minister Hun Sen (C) speaks to passengers on board the Westerdam cruise ship in Sihanoukville on Feb. 14, where the liner on Feb. 13 was docked after being refused entry at other Asian ports due to fears of the virus.
Jay Butler, deputy director for Infectious Diseases at the Centers for Disease Control and Prevention (CDC), speaks to the media inside the Emergency Operations Center in Atlanta, Georgia, U.S., on Feb. 13.
An employee receives payment from a customer through a container on a stick, in Beijing on Feb. 12. A ramp has also been set up to deliver food from the counter.
Members of the media stand near the cruise ship Diamond Princess, where dozens of passengers were tested positive for coronavirus, at Daikoku Pier Cruise Terminal in Yokohama on Feb. 11.
Workers produce protective clothing at a factory in Wuxi, China, on Feb. 8. The factory, which previously produced suits and sportswear, switched to production of protective clothing as demand increased due to the ongoing coronavirus outbreak.
Hong Kong Chief Executive Carrie Lam speaks to the media during a press conference on the coronavirus situation in Hong Kong on Feb. 8. Lam said that the government has bought 48 million masks and received 17 million more from China to counter the shortage of masks in Hong Kong.
Flight attendants wearing protective clothing and masks serve snacks to Canadians, who had been evacuated from China due to the outbreak of novel Coronavirus on an American charter plane, on another aircraft taking them to Canadian Forces Base (CFB) Trenton from the Vancouver International Airport in Richmond, Canada, on Feb. 7.
Taiwan's President Tsai Ing-wen speaks about the coronavirus situation during a news conference at the Centers for Disease Control in Taipei, Taiwan, on Feb. 7.
Members of an emergency team participate in a drill to prepare for the potential arrival of passengers infected with the coronavirus at the Viru Viru International Airport, in Santa Cruz de la Sierra, Bolivia, on Feb. 6.
Workers in protective gear are seen on Japan Coast Guard boats in Yokohama, on Feb. 5, bringing patients from the quarantined Diamond Princess cruise ship.
This handout photo released by Malaysia's Ministry of Health shows citizens being directed onto a bus by health officials as they arrive at the Kuala Lumpur International Airport in Malaysia in Feb. 4.
Health services staff members wearing protective gear interact with passengers at the Hamid Karzai International Airport in Kabul, Afghanistan, on Feb. 2.
Members of the Association for Sri Lanka and China Social and Cultural Cooperation (ASLCSCC) hold candles during a vigil to pray for people who are suffering from coronavirus across the world, in Colombo, Sri Lanka, on Feb. 1.
Turkish Health Minister Fahrettin Koca speaks to the press after a Turkish cargo plane carrying 42 passengers from Wuhan landed at Etimesgut Military Airport in Ankara, Turkey, on Feb. 1.
Officials make preparations in Turkish Air Forces' A400M cargo plane at Etimesgut Military Airbase in Ankara, which is to depart to China to fly Turkish citizens out of Wuhan, on Jan. 31.
China's U.N. Ambassador Zhang Jun stated in his press briefing that over 130 patients have been cured of pneumonia caused by the coronavirus in New York City on Jan. 31.
Thailand Prime Minister Prayuth Chan-ocha (C) speaks to journalists during a visit to Suvarnabhumi Airport to inspect measures in place to monitor passengers as they arrive in Bangkok on Jan. 29.
Children are seen wearing facial masks as a precaution after Nepal confirmed the first case of coronavirus in the country, at Matribhumi School in Madhyapur Thimi, Nepal, on Jan. 29.
(L-R) Sabine Hagenauer of the infection department at the 4th medical department of Kaiser Franz Josef Hospital, Michael Binder, medical director of the Vienna Hospital Association, and Judith Aberle of the department of virology, Medical University Vienna, address a press conference at Kaiser-Franz-Josef hospital in Vienna, Austria, on Jan. 26. A Chinese flight attendant was quarantined in the hospital with symptoms of flu, in what authorities suspected as the first coronavirus case in the country.
A Rospotrebnadzor (Russian Federal Service for Supervision of Consumer Rights Protection and Human Well-Being) official uses a thermal imaging device to conduct a temperature check of passengers arriving at Krasnoyarsk International Airport on a plane from Cam Rahn, Vietnam, in Russia on Jan. 23.
Director-General of World Health Organization (WHO), Tedros Adhanom Ghebreyesus, takes part in a news conference after a meeting of the International Health Regulations (IHR) Emergency Committee to discuss about the outbreak of Pneumonia in China and other countries due to the 2019-nCoV, in Geneva, on Jan. 22.
Kazakh sanitary-epidemiological service worker uses a thermal scanner to detect travelers from China who may have symptoms possibly connected with the coronavirus at Almaty International Airport in Kazakhstan Jan. 21.
Dozens of diggers work to build a new hospital in Wuhan, on Jan. 25. Due to the large number of infected people, the government decided to establish a temporary 1,000-bed hospital.
95/95 SLIDES
Realme, a major smartphone player in India, indicated that there might be some supply delays from China but this will not have any impact on its “business plans” or “product pricing”. “Our supply chain has not been affected for the time being,” a company spokesperson said.
Realme indicated there might be some supply delays from China but this will not have any impact on its “business plans” or “product pricing".
An analyst, who wished to remain anonymous, told indianexpress.com that the vendors seem to have enough “cushion” for now. He, however, did acknowledge that if the situation does not change in the coming days there might be a negative impact on smartphone vendors in the second quarter of 2020.
Vivo, the second-largest smartphone vendor in India by volumes, said the company is making sure there is enough stock of most models available in the market. “Through proper planning of our supplies we are trying to avoid the situation where retailers need to hoard the supplies of our phones,” a Vivo India spokesperson said in a statement.
Despite the pressures, Chinese vendors have said a price hike was unlikely in the short run. “We are fully equipped to meet demand locally and therefore, do not have any plans for a hike in prices,” a Realme India spokesperson said. HMD Global, the company behind Nokia-branded phones, too said there was no plan for a price hike.
A senior executive of a renowned retail chain said the supply of iPhone 11 and iPhone 11 Pro are constrained in India. “For the past two to three weeks, we have not got fresh supplies of iPhones.” But the retailer said it had enough stocks of iPhone 11 and iPhone 11 Pro to meet the demand. Apple makes most of its high-end iPhones and other products in China.
OnePlus is also impacted by the Coronavirus outbreak in China, the executive revealed.
Analysts say most vendors have enough supplies for the month of March. However, the true impact of coronavirus will be visible when manufacturers starting running low on components. “Hopefully manufacturing should ramp up substantially by March-end, but supply chain and logistics will have a long-lasting impact,” warned Singh of IDC. This, he said, could also prompt companies to look at creating a backup for China.
COVID-19, the novel coronavirus that originated in Wuhan, China, continues to spread across the globe, including India. As of Tuesday morning, around 90,932 people across 58 countries have been infected, while the death toll has risen to 3,125.
Last month, the world's biggest mobile tradeshow — the Mobile World Congress in Barcelona — had to be cancelled after most of the top smartphone companies and telecom gear makers decided to back out over coronavirus concerns. Meanwhile, Apple had told investors that the coronavirus outbreak is severely affecting the production of iPhones.