China virus causes scare for India's smartphone makers

Published January 31, 2020
A passenger films with his smartphone as he exits the port after disembarking with others from the Costa Smeralda cruise ship docked in the Civitavecchia port, 70km north of Rome, early on January 31, 2020. — AFP
A passenger films with his smartphone as he exits the port after disembarking with others from the Costa Smeralda cruise ship docked in the Civitavecchia port, 70km north of Rome, early on January 31, 2020. — AFP

The coronavirus outbreak in China could start to disrupt India's production of smartphones if it continues to spread in February, as it could delay component shipments, industry executives said.

India is the world's biggest smartphone maker after China but is still largely dependent on China for supplies of parts such as cells, display panels, camera modules and printed circuit boards.

Taiwan's Foxconn and Wistron make iPhones in India for Apple, and Foxconn produces phones there for China's Xiaomi as well. Other smartphone makers in India include South Korea's Samsung and China's OnePlus.

So far, smartphone makers in India have weathered the impact of the virus, which has already killed 213 people, partly because they had ramped up inventories of Chinese-made parts anyway to cover the Lunar New Year holiday period when China's factories close down.

"Those disruptions were already planned but if it (the virus' spread) gets prolonged then for March and April production we will have serious trouble," said S.N. Rai, the co-founder of homegrown smartphone maker Lava. "We're definitely worried about it."

Some components can be shipped in from markets such as South Korea, Vietnam or Taiwan, but smartphone makers will only make such purchases as a "last resort" as it would force companies to make changes including in design and software, Rai said.

China's OnePlus said its Indian operations could manage, in the short term at least.

"We are well covered because we have the entire production in India, we already have enough stock, and even going forward many of the components will anyway be coming directly from other markets," said Vikas Agarwal, the India head of OnePlus.

While Beijing has expressed confidence in defeating the "devil" virus, which is yet to be declared a global emergency by the World Health Organisation, major companies such as Alphabet Inc's Google and Sweden's IKEA have closed operations in China.

India's Tata Motors, which counts China as a major market for its luxury Jaguar Land Rover cars, said on Thursday it was worried about the coronavirus and warned that the outbreak could hit profits.

As several airlines suspend flights to China, the movement of technical staff from the country — such as on-site support executives, machine and automation specialists — will also be curtailed and that will hit India's smartphone sector, an executive at another foreign-owned smartphone maker, who did not wish to be named, said.

For now, the industry just hopes the outbreak can be contained within the next two weeks.

"If the problem persists beyond February 10 then we have a real problem at hand," said Pankaj Mohindroo, head of the India Cellular & Electronics Association, an industry lobby group.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

All this talk
30 Apr, 2024

All this talk

IT is still early days, but there have been several small developments over the past week that, it is hoped, may add...
Monetary policy
30 Apr, 2024

Monetary policy

ALIGNING its decision with the trend in developed economies, the State Bank has acted wisely by holding its key...
Meaningless appointment
30 Apr, 2024

Meaningless appointment

THE PML-N’s policy of ‘family first’ has once again triggered criticism. The party’s latest move in this...
Weathering the storm
Updated 29 Apr, 2024

Weathering the storm

Let 2024 be the year when we all proactively ensure that our communities are safeguarded and that the future is secure against the inevitable next storm.
Afghan repatriation
29 Apr, 2024

Afghan repatriation

COMPARED to the roughshod manner in which the caretaker set-up dealt with the issue, the elected government seems a...
Trying harder
29 Apr, 2024

Trying harder

IT is a relief that Pakistan managed to salvage some pride. Pakistan had taken the lead, then fell behind before...