Coronavirus To Cause $42 Billion Revenue Gap In Global Consumer Device Shipments Over The Next 9 Months

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Coronavirus To Cause  Billion Revenue Gap In Global Consumer Device Shipments Over The Next 9 MonthsCoronavirus To Cause  Billion Revenue Gap In Global Consumer Device Shipments Over The Next 9 Months

New analysis from Juniper Research found that Coronavirus could cause around a $42 billion revenue gap over the next 9 months for smart device vendors. The analysis examined a number of key device verticals including smartphones, tablets, consumer robotics, smart speakers and smart wearables. Three impact scenarios, low, medium and high, illustrate a range of possible outcomes.

Production Shortfall of 80 Million Devices

In our high impact scenario, the research forecast a reduction in output of over 80 million devices over the next 9 months. Delays to the delivery of components, such as batteries, processors, and displays, will each have the potential to disrupt production rates from device vendors. These, including AppleSamsungAmazonXiaomi and Huawei, must all ensure that any gaps in their supply chains are closed in order to meet the demand for their devices.

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The advisory note forecasts that smartphones will comprise the majority of this device shortfall over the next 9 months, accounting for over 85% of missed shipments. It anticipated that the virus may also cause longer-term issues, including the development of new devices. Additionally, it noted that the financial uncertainty from the impact of the virus means that demand will be lower, leaving device vendors unable to completely recover lost device sales.

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Vendors Must Adapt ‘Resilient’ Strategies

The research urged device vendors to diversify their component supplier bases, arguing that doing so will enable them to ensure that future gaps in the supply chain are filled.

Read:  EFG Hermes Blog : Troubling Days, Not the End of Days

Just-in-time manufacturing has been a weak link in the resilience of device vendor supply chains. This kind of manufacturing involves organising supply chains to timed deliveries of components immediately prior to the device manufacturing stage. Whilst holding stock can be expensive, Juniper Research believes that vendors must now consider building inventories of ‘strategic’ components.

Juniper Research provides research and analytical services to the global hi-tech communications sector; providing consultancy, analyst reports and industry commentary.

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