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Coronavirus outbreak slowing down supply of high-end, imported smartphones: Report

According to an IDC report, published lat week, China will take the biggest hit but other countries will also feel the impact of supply chain disruptions (Bloomberg)Premium
According to an IDC report, published lat week, China will take the biggest hit but other countries will also feel the impact of supply chain disruptions (Bloomberg)

  • An industry executive told Mint, distributors are saying that they are getting limited stock but only in case of some specific handsets
  • Experts believe companies that have started manufacturing in India and have enough stock of components required to assemble phones in the country

Phone companies dependent on China for their supplies have reportedly started to feel the heat of the lockdown of Chinese factories due to coronavirus outbreak. Phone retailers, as per an ET report, have said that supplies of several premium handsets including iPhones are running low in stores with only 10-20% of the usual stock getting delivered to them in the last few weeks.

An industry executive told Mint, distributors are saying that they are getting limited stock but only in case of some specific handsets which are imported directly from China. Many of the high end Apple devices are not available in the market due to shortage of units. Some stocks of premium Samsung handsets are also not available because of batteries being manufactured in China. In addition to smartphones, accessories and other gadgets are getting affected including the premium screen guards for latest devices.

“There was a shortage of few imported components which was due to several suppliers’ factories in China postponing the re-opening time of their facilities after recent closures. But now, almost all the major suppliers are back to work again, and the situation will be seeing more improvement soon," Realme said in response to a Mint query.

Manish Khatri, Partner, Mahesh Telecom, a Mumbai based retailer, points put, "As of now there is no such great shortage of smartphones in retail stores as most of the vendors have units in stock till the end of March. Limiting stocks can be a part of a long term strategy to ensure there are enough units after the first quarter if the lock down of factories continues in China."

Experts believe companies that have started manufacturing in India and have enough stock of components required to assemble phones in India will see a delayed effect on the supplies as compared to those that are shipping finished smartphones from China. “OEMs with one or two months inventory will be more affected compared to those who are making phones in India who will see the effect maybe after a quarter down the line," said Nakul Kumar, Co-founder and COO of Cashify.

According to an IDC (International Data Corporation) report, published lat week, China will take the biggest hit but other countries will also feel the impact of supply chain disruptions. Component shortages, factory shutdowns, quarantine mandates, logistics, and travel restrictions will impede smartphone vendors from manufacturing handsets and launching new devices. The situation is expected to stabilise from the third quarter if the Coronavirus situation improves.

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