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As the world continues to battle the coronavirus outbreak, global supply chains are also threatened and its impact is rippling through smartphone tech giants like Apple and Huawei.

At the epicentre of the virus in China, many businesses and companies have ceased or reduced operations in efforts to contain the spread of the virus, affecting multiple industries. This includes the smartphone industry as most parts are sourced or even entirely manufactured in the region.

Apple has announced that it expects its revenues to be affected by the virus outbreak due to slowdown in production of phones and closure of Apple stores in China during the crisis. Moreover, Foxconn, the main manufacturer of iPhones has closed some of its biggest facilities and diverted its resources to production of medical items. Although Huawei has not announced any production problems, analyst expect that it will still be affected due to its reliance on manufacturing parts sourced from China.

Reuters reported that Samsung on the other hand, would be least affected by this crisis. Samsung has moved much of its production to Vietnam in 2009 to lower its cost and has closed its last manufacturing facility in China in 2019. With half of its phones manufactured in Vietnam, the virus has a lesser impact on production compared to Apple or Huawei. However, if the situation is prolonged, the company too will feel the impact of the virus as many components are sourced from China. Furthermore, the Vietnam government is imposing stricter border controls and restricting the daily transport volume from China to Vietnam.

Given the unpredictable nature of the virus and the severe supply chain disruptions, manufacturers will have to remain vigilant and monitor the global situation closely.

 

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