Industry insiders expect that smartphone prices might likely go up by 6 to 7% in the wake of coronavirus in China. Most warehouses have run out of stocks and it is becoming increasingly difficult for Chinese companies to export their products. The demand is very high but the shipments are just not going through. In fact, feature phones may become expensive exponentially too. Many feature phones may see price increases of more than 10%.
Why is the coronavirus situation affecting the smartphone industry?
China has shut down a number of factories in its industrial heartland, which has resulted in a complete breakdown of manufacturing. Smartphone companies are unable to put together their devices because suppliers are located in the hardest-hit regions. The factories are closed indefinitely and retailers just do not have any stocks.
The problem is so serious that there is now a ban on Chinese companies participating in the Mobile World Congress, which is due to take place in Barcelona, Spain. Many sources have noted that companies from Wuhan are completely prohibited from entering the event venue, Companies from other parts of China may face stringent scrutiny.
What is the human cost of this trade embargo as a result of the coronavirus?
The deadly disease has already claimed more than 1,500 people’s lives. Close to 42,000 people are now suffering from the virus. China exports a large number of electronic goods to India and other neighboring countries.
With trade, embargoes bring clamped on China, and China itself closing down factories indefinitely, smartphone manufacturers, retailers, and exporters simply have no other go but to increase prices. This has also resulted in many people losing their jobs, and employees being anxious about their job prospects.
When will the problem begin to subside?
The price increase may happen as early as 15-20 days, and the impact will be far-reaching. The impact of the coronavirus will last at least 60-180 days. People will notice the ripple effects of the problem across the smartphone industry and international markets.
Thankfully, some manufacturers in China has slowly begun to operate with the permission of their government. This shows that there is light at the end of the tunnel, though the journey towards light nay is longer than expected.
