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Mar 16

The Biggest Business Impacts of the Coronavirus Pandemic

Telecoms and Technology

 

1. The clearest and most immediate business impact of the coronavirus pandemic has been a major disruption to supply chains. Having originated in China, the region was hit hard as a large number of citizens contracted the disease and many were forced into quarantine. This led to partial and full shutdowns of plants and factories, some of which were being used by prominent technology companies to manufacture their goods and products. For example, Apple experienced shortages on its iPhone supply as a result of the company’s primary manufacturer, Foxconn, shutting down much of its production in China. Ultimately for Apple, this will lead to a significantly reduced forecast in iPhone shipments through Q1—by as much as 10%, according to estimates by Apple analyst Ming-Chi Kuo cited by MacRumors. And while companies often have contingency plans, which revolve around ramping up production in a region that isn’t impacted, the rapid spread of the coronavirus across the globe makes it very difficult to pinpoint which regions would be least affected. Even then, the momentum and resources of the Chinese economy will not be easily replicated—”Made in China” initiatives have seen the government invest billions in advanced manufacturing sectors, including telecommunications equipment and semiconductors.

2. The spread of the coronavirus has caused several of the most important tech conferences to be canceled, likely resulting in numerous missed partnership opportunities. Most notably, Mobile World Congress (MWC), which was set to take place February 24-27 in Barcelona, was canceled due to concerns over the virus. MWC is a cornerstone event in the connectivity industry, as it brings together the most important companies in the space to network, share innovations and forge new business partnerships. Several companies rescheduled the events they had planned for MWC, but the continued presence of the coronavirus led others to cancel them entirely. Beyond MWC, Facebook canceled its F8 developer conference and Global Marketing Summit; Google shifted its Google Cloud Next event to online only; and IBM likewise had to livestream its developer’s conference, which last year hosted over 30,000 attendees. Altogether, the cancellation of major tech events has incurred over $1 billion in direct economic losses, according to estimates from PredictHQ cited by Recode.

Online alternatives have helped limit the fallout from canceled conferences, but tech industries will likely still suffer a period of stifled innovation due to forgone in-person business opportunities. Conference attendees do not have the same opportunities to network via live streaming as they do attending in-person events. It would be harder for marketers to casually share best practices over the live streamed Facebook Global Marketing Summit, for instance, than it would be if the event actually took place. Though it is difficult to quantify the value of these chance encounters or informal network sessions, the effects will undoubtedly be felt throughout the impacted industries.

3. The growing need for remote interactions amid the coronavirus pandemic has highlighted a need for 5G technology, potentially accelerating adoption in the long term. 5G’s lightning-fast speeds, near-instantaneous communications and increased connection density make it primed for remote interactions, which has become top of mind for many organizations and enterprises as caution mounts over the spread of the virus. Two key areas—telehealth and teleconferencing—are becoming critical for enterprise operations amid the pandemic, and we think that increased dependence on these areas will help strengthen the appeal of 5G:

  • Telehealth: The technical superiority of the new standard empowers physicians to diagnose, treat and operate on patients without the need to be physically near them. We’ve already seen such use cases for 5G to combat coronavirus in China: In January, telecoms ZTE and China Telecom designed a 5G-powered system that enables remote consultations and diagnoses of the virus by connecting physicians at West China Hospital to 27 hospitals treating infected patients. Given the ability of 5G to expand the reach of expertise and services offered by hospitals in this time of increased need, we expect more hospitals will look to tap into 5G to take advantage of the benefits offered by the new standard.
  • Teleconferencing: Many employers have increased their reliance on enterprise teleconferencing tools—such as Microsoft Teams, Google Hangouts and Zoom—as their employees switch to remote work due to public health concerns. We expect that employers’ dependence on such tools during the coronavirus pandemic will strengthen the case for 5G connectivity in the home—and in the office as enterprises recognize the value that teleconferencing tools offer. That’s because a 5G connection will be able to provide real-time and uninterrupted communication that’s not possible with most wired connections today. 

 

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