Consumer electronics could suffer supply chain issues for a long time

Consumer electronics could suffer from supply chain problems for a long time due to the rapid shut down of China’s manufacturing during the Corona Virus outbreak.

GlobalData’s report, COVID-19 Impact on Consumer Electronics – Thematic Research, notes when COVID-19 broke out in China, the country was quick to slow down its production, eventually ceasing all manufacturing as the country went into lockdown. This had a drastic effect on supply chains across the world, as many industries, including the consumer electronic sector, are heavily reliant on components that are manufactured in China and could no longer access these resources, says GlobalData, a leading data and analytics company.

Apple has been affected more than most companies in the space. “More than 90 percent of Apple’s products are made in China and the Chinese marketplace accounts for 18 per cent of its revenues.”

Principal Analyst, Thematic Research at GlobalData David Bicknell said that if company supply chains are under pressure as a result of COVID-19, the next – and potentially bigger – problem is business confidence.

Bicknell continues: “Companies around the world are trying to enable remote working to keep themselves running. That is good news for laptop suppliers, but the economic contagion caused by COVID-19 will affect general consumer confidence and may dampen consumer demand for electronics until the health outlook looks brighter.”

There are some bright spots in the gloom, with drones and 3D printers in demand. Drones are being used on the front line around the world to deliver medical supplies and ensure the public stays at home, and 3D printing is coming to the rescue for hospitals urgently needing spare parts for respirators.

Bicknell concludes: “There will be some demand from cooped-up, at-home consumers, but meeting that demand will require consumer electronics companies to free up their supply chains, and ensure that products can be transported into countries now in lockdown, which may be difficult. Eventually, when life has returned to normal post-virus, there will be pent-up spending on devices.”