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Coronavirus Outbreak: Technology, Business and Economic Impact

The Novel Coronavirus (COVID-19) outbreak and related quarantines continue to impact business and technology supply chains at Apple, Facebook, Google, HP Inc., Qualcomm, Microsoft Nintendo, Samsung, Tesla and elsewhere. Moreover, multiple technology conferences worldwide have been canceled, postponed or impacted on the sponsorship front.

Here are the latest updates from a range of sources as of Thursday, February 27 at 8:00 p.m. ET.

1. Human Toll: The novel coronavirus has infected more than 82,000 people and triggered more than 2,800 deaths. There are over 3,500 confirmed cases of novel coronavirus in at least 45 countries and territories outside mainland China. And the number of new cases outside of China is now outpacing new cases within that country. Source: CNN

2. Outbreak in Context: Although the outbreak is serious news and is expected to impact the United States, it’s also important to put the coronavirus case numbers in context. For instance, the flu each year in the U.S. triggers:

  • nine million to 45 million illnesses;
  • 140,000 to 810,000 hospitalizations; and
  • 12,000 to 61,000 deaths, according to CDC data since 2010.

3. Travel: Multiple updates…

  • Airlines based in North America, Europe and Asia are canceling flights to China. Source: CNN Business, January 29, 2020.
  • The Trump administration on January 31 declared the coronavirus a public health emergency in the United States, and announced that people who pose a risk of transmitting the disease will temporarily be suspended from entering the U.S. Source: CNBC, January 31, 2020.
  • United Airlines and American Airlines said this week that they would not resume normal service to mainland China until April 24, almost a month later than planned. Source: The Washington Post, February 13, 2020.

4. World Health Organization Guidelines: The World Health Organization has released advice and guidelines related to the Coronavirus.

Coronavirus Outbreak: Technology Supply Chain, Business and Conference Updates

The Coronavirus’s total economic impact could stretch across more than 5 million businesses worldwide, according to Dun & Bradstreet research.

Here are updates involving specific businesses, organizations, conferences, countries and regions.

Airbus: The company shut down a factory in China that accounts for almost 10 percent of the production of its most popular jet, as precautions taken to contain the coronavirus outbreak. Source: The Wall Street Journal, February 5, 2020.

Alibaba: The company has launched an online B2B sourcing platform to help medical organizations route supplies directly to regions that most urgently need assistance amid the outbreak.

Apple Supply Chain: Multiple updates…

  • The potential impact of Coronavirus on Apple’s supply chain is limited, analysts say. Source: Barron’s, January 28, 2020.
  • Apple on January 28 issued a wider-than-usual sales forecast to reflect what CEO Tim Cook called “uncertainty” caused by a virus outbreak that’s cutting retail traffic, shutting stores and prompting the company to limit employee travel in China, one of its most important markets. Apple has some suppliers in the Wuhan area. All of the suppliers there are alternate sources and Apple is working on mitigation plans to make up any expected production loss. With respect to supply sources that are outside the Wuhan area, the impact is less clear at this time. Source: Bloomberg, January 29, 2020.
  • Apple on February 1 said it would close its stores in mainland China, one of its biggest markets, until February 9. The company operates 42 stores in mainland China, though its iPhones and other devices are widely available through other retailers. Source: New York Times, February 1, 2020.
  • Foxconn could see a “big” production impact and shipments to customers including Apple face disruption if a Chinese factory halt due to the coronavirus outbreak extends into a second week. Source: Reuters, February 3, 2020.
  • Apple said it’s extending its store closures in China because of the coronavirus. It had originally planned to keep stores closed until Feb. 9. Source: CNBC, February 7, 2020.
  • Apple’s quarterly sales will fall short of Wall Street’s expectations amid supply chain issues related to the coronavirus. Source: Reuters, February 18, 2020.

Black Hat Asia 2020: The cybersecurity conference, originally scheduled for March 31 to April 3 in Singapore, has been postponed and will be rescheduled for later this year. That’s not to be confused with Black Hat USA 2020, which remains on schedule for August 1-6 in Las Vegas.

Cisco Systems Conference: Cisco Live Melbourne, scheduled for March 3-6 in Australia, is canceled.

Chinese Government: Authorities in China are taking steps to reduce the mass migration of workers back to factories after the Chinese lunar new year holiday to reduce the risk of infection. For example, Suzhou, a tech hub north-west of Shanghai, has barred businesses from resuming operations before February 8. The central government has so far extended the holiday by three days until February 2. Source: Financial Times, January 29, 2020.

Conferences – Asia: More than two dozen large trade fairs and industry conferences in Asia have been postponed because of the spread of the China coronavirus, shuttering events where billions of dollars worth of deals have been signed in the past. Source: Reuters, February 6, 2020.

Facebook: Multiple updates…

  • The social media giant says the global outbreak of the deadly coronavirus is likely to impact production of its Oculus virtual reality headsets, which are produced in China. Source: Bloomberg, February 7, 2020.
  • Facebook canceled a worldwide marketing conference set for March in San Francisco. More than 4,000 people were expected to attend. Source: Routers, February 14, 2020.
  • Facebook canceled its F8 Developer Conference 2020 amid coronavirus outbreak concerns. The conference had been scheduled for May 5-6 in San Jose. Source: ChannelE2E, February 27, 2020.

Google: The search giant is temporarily closing all of its offices in China, Hong Kong, and Taiwan as a result of the coronavirus. Source: BBC, January 30, 2020.

HP Inc.: The PC maker’s  bottom line will take a hit this quarter due to the coronavirus epidemic, CEO Enrique Lores told CNBC. Source: CNBC, February 26, 2020.

Huawei: The telecom giant said February 3 that it has resumed production of goods including consumer devices and carrier equipment, and operations were running normally. Source: Reuters, February 2, 2020.

Hyundai Motor: The company is idling all seven of its plants in South Korea because of a lack of parts from suppliers in China. It was the first big auto maker to shut down production outside of China because of supply-line bottlenecks resulting from widespread factory outages and strict limits on worker movements in the country. Source: The Wall Street Journal, February 5, 2020.

Iran: Multiple updates expected…

  • Twelve people have died and 61 have been infected with the coronavirus in Iran, Tehran’s health ministry said. Source: Reuters, February 24, 2020.

Italy: Multiple updates…

  • The coronavirus outbreak has struck at least 420 people in Italy as of February 26, 2020. The outbreak has crippled commerce in Northern Italy, particularly in Milan. Source: Reuters, February 26, 2020.
  • Italy’s number of COVID-19 coronavirus cases spiked by more than 50% in just 24 hours and now stands at 650, the Italian Ministry of Health says, adding that 17 people have died from the respiratory virus. More than 400 of the cases are in the hard-hit Lombardy region, where some towns are under a lockdown. Source: NPR, February 27, 2020.

Japan: Multiple updates expected…

  • Prime Minister Shinzo Abe  asked all elementary, junior high and high schools nationwide to close through the students’ spring break, which typically ends in early April. Source: Japan Times, February 27, 2020.

Marriott: The coronavirus could cost the company $25 million per month in lost revenue if the outbreak continues. Marriott is experiencing low occupancy in the Asia Pacific region. Source: CNN, February 27,  2020.

Microsoft: The technology giant says its Windows OEM business (i.e., sales to third-party PC makers) and Surface business will fall short of financial guidance because of the coronavirus. A statement from the company said:

“Although we see strong Windows demand in line with our expectations, the supply chain is returning to normal operations at a slower pace than anticipated at the time of our Q2 earnings call. As a result, for the third quarter of fiscal year 2020, we do not expect to meet our More Personal Computing segment guidance as Windows OEM and Surface are more negatively impacted than previously anticipated. All other components of our Q3 guidance remain unchanged.” Source: Microsoft Press Release, February 26, 2020.

Mobile World Congress (MWC) Barcelona 2020: MWC organizers on February 12 officially canceled the event, which had been scheduled for 24-27 February 2020.

Nintendo: Japan’s Nintendo said delays to production and shipping of its Switch console and peripherals like the Joy-Con controllers to the Japan market due to the coronavirus epidemic were “unavoidable.” Source: Reuters, February 6, 2020.

Pulse Secure: The company has introduced free Pulse Connect Secure (PCS) subscriptions for workers in Asia impacted by the Coronavirus health crisis.

Qualcomm: The chip raised concerns around the threat to the mobile phone industry’s supply chain from the coronavirus outbreak in China, dragging down shares. Source: Reuters, February 5, 2020.

Robert Bosch: The chief executive of Robert Bosch, the world’s biggest auto components supplier, warned that coronavirus could impact its global supply chain, which is heavily dependent on China. Source: Reuters, January 29, 2020.

RSA Conference 2020: The massive cybersecurity event is scheduled for February 24-28 in San Francisco. AT&T Cybersecurity, IBM Security and Verizon have canceled their participation, but the vast majority of sponsors are moving forward with their show plans. RSA Conference 2020 organizers say they are “paying close attention to new developments” involving the virus and following various health organization recommendations.

Russia: Moscow is using facial recognition technology to ensure people ordered to remain at home or at their hotels under coronavirus quarantine do so, the mayor of the Russian capital said. Source: Reuters, February 21, 2020.

Salesforce Conference: A Salesforce World Tour event set for Sydney on March 4 has transitioned from a face-to-face gathering to an online event.

Samsung: The smartphone maker on February 22, 2020, said that one coronavirus case had been confirmed at its mobile device factory complex in the southeastern city of Gumi, causing a shutdown of its entire facility there until February 25, 2020. Source: Reuters, February 22, 2020.

Solar Industry: China’s solar industry is facing potential raw material and labor shortages amid efforts to contain the coronavirus, curbing their ability to resume full production. Source: Bloomberg, February 6, 2020.

Smartphone Sales: China’s smartphone sales may plunge by as much as 50% in the first quarter, as many retail shops have closed for an extended period and production has yet to fully resume due to the fast spread of a new coronavirus, according to research reports. Source: Reuters, February 10, 2020.

Starbucks: The global coffee store chain temporarily closed more than half of its stores in mainland China as an outbreak of coronavirus has surged through the country, affecting thousands of people. Source: NPR, January 28, 2020.

Tesla: The automaker warned of delivery delays in China. Deliveries set for early February would be affected. Tesla’s new factory in Shanghai has been closed due to the outbreak. Source: The Wall Street Journal, February 5, 2020.

United States: Multiple updates expected…

  • The U.S. Centers for Disease Control and Prevention (CDC) alerted Americans to begin preparing for the spread of coronavirus in the United States after infections surfaced in several more countries. Source: Reuters, February 25, 2020.

Vietnam: The country’s manufacturing sector is suffering supply chain problems caused by the coronavirus epidemic, which may delay production of Samsung Electronics’ new phones, the Ministry of Industry and Trade said. Source: Reuters, February 21, 2020.

Additional Worker Impact:  Tech companies in China — such as Alibaba, Tencent and Baidu — have all told their staff to work from home for an extended period. Source: Financial Times, January 29, 2020.

Blog originally published January 29, 2020. Regularly updated since that time with additional coronavirus updates. Check back for daily updates to this blog.

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