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What Does Coronavirus Mean for Gadget Sales?

by Neil Mawston | Jan 21, 2020

There is rising panic among authorities worldwide that Novel Coronavirus (2019-nCoV) is spreading like wildfire and will hit global economic trade in the first half of 2020. As I write today, stockmarkets are sliding and shares are a sea of red.

Authorities, like the World Health Organization (WHO), are worried because the new coronavirus appears highly spreadable. For example, a report from China suggests one or two poorly individuals may have infected up to 14 hospital staff in a matter of days. Cases of new infections across Asia more than tripled in one weekend. There is no vaccine (yet). If thousands or millions of consumers are going to fall sick with flu-like illness, it could depress economic activity and even cause a recession. You cannot go shopping or assemble gadgets when exhausted and laying up in bed.

What should consumer electronics (CE) companies do?

We recommend a 3-point plan:

1. Do not panic. The fear of an epidemic is just a theory at the moment. The SARS scare in 2003 and MERS in 2012 showed global authorities are well trained in containing new viruses.

2. Initiate heightened hygiene activities at home and work. Wash hands more often, cover sneezes with a disposable tissue, wear gloves on public transport, minimize international travel for now, and so on.

3. Have a contingency plan prepared for immediate execution. If your workplace is hit by coronavirus, a large percentage of the workforce may be unable to work for days or weeks. Factories or stores could be closed down (quarantine). Be ready to shift production to other locations, bus in temporary staff from elsewhere, and so on. Don't get caught out.

Hopefully, the new coronavirus will be contained quickly, patients will recover strongly, and gadget sales will not be impacted in any significant way. But, in a worst-case "epidemic" scenario, where the virus spreads out of control for weeks or months, we think demand or supply of smartphones, laptops, TVs, etc. in Asia or worldwide could be reduced by between 1% and 5% in 2020. Hope for the best, prepare for the worst.

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