Coronavirus: The outbreak of Coronavirus in China has started disrupting the component supply chain for the technology companies in India. Asus India has issued an open letter for all the fans waiting to buy the ROG II smartphone.
"Dear Fans, We know you've been excited to get your hands on the ROG Phone II. While we had steady availability for long, but due to the disruption in supply caused by the prevailing situation in Asia, ROG Phone II will face a temporary shortage. Rest assured we are working hard to ensure that your favourite gaming smartphone will be back in stock soon. We shall keep you updated. Thank you for your patience! Team Asus," said Asus in a press statement.
The Taiwanese technology company did not highlight the ongoing coronavirus as the reason behind disruption in the supply chain.
Over the last few years, the focus has been shifted to 'Make In India' initiative with all the top brands including Apple, Xiaomi, OnePlus, Vivo, Oppo and HMD Global etc manufacturing or assembling their smartphones in India.
Xiaomi has been locally assembling PCBA in India. In addition, even smartphone chargers, USB cables and batteries are nearly 100 per cent locally sourced. According to Xiaomi, nearly 65 per cent of the value of the smartphone is locally sourced. Yet, for many brands, most of the components continue to be imported from China. There have been reports suggesting Chinese vendors hiking component prices by two-three per cent due to supply shortage as the factories are being shut down in China.
"All said, the shadow of coronavirus looms large on the Indian smartphone industry. China accounts for almost 85 per cent of the mobile phone components imported into India. If the coronavirus-infected lockdown in China continues, it will spell serious trouble for smartphone brands in India in H1 2020, and potentially even beyond," cautioned Prabhu Ram, Head-Industry Intelligence Group (IIG), CMR.
Varun Mishra, Research Analyst at Counterpoint Research pointed out that there have been growing tensions among several countries that have impacted the smartphone market; for example, the US pressure on Huawei, and tensions between Japan-Korea that led to uncertainties in the memory market. "Supply chains have been upset, causing various companies to rethink their strategies and reduce dependence on single markets. 2020 will likely see efforts to further diversify investments across geographies to mitigate risks. The current coronavirus outbreak in China is the latest issue to threaten supply chains," he said.
Not just smartphones but a good chunk of TV components are also imported from China. Even Apple and Google have closed their corporate offices until February 9 due to the outbreak.
According to WHO, coronaviruses (CoV) are a large family of viruses that cause illness ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome and Severe Acute Respiratory Syndrome. A novel coronavirus (nCoV) is a new strain that has not been previously identified in humans. There have been 350 deaths in China, while an increasing number of countries have been reporting confirmed Coronavirus cases.