Taiwan’s Foxconn will return to its expected production levels in China by the end of March, following a severe drop reportedly attributed to the coronavirus. That’s primarily due to the indirect impacts of the virus, the company says. Specifically, travel restrictions and an extended Lunar New Year break have resulted in slower manufacturing gains.
Quarantine requirements in China have had similar impacts on the industry, chiefly associated with issues in terms of both supply chain and demand. Because of that, Foxconn has been forced to pull back on its guidance and expectations for the first quarter.
The company has also been forced to reduce its guidance for first-half 2020 revenue growth to a “mild” extent. That’s down from its initial guidance, expecting “slight growth” for the full year. For the first quarter, Foxconn expects around a 15-percent in businesses revenue from consumer electronics to enterprise products.
Coronavirus’s mobile impact spreads well beyond Foxconn production or China
The direct impact of coronavirus on the mobile industry and on Android, in particular, extends well beyond Foxconn. It also extends beyond China, although the impact there is going to be more widespread given the circumstances surrounding the virus. That may be prominent nowhere more than the cancellation of this year’s MWC 2020 event in Barcelona. The cancellation was ultimately blamed on concerns surrounding the virus.
Coronavirus has also had drastic implications for individual OEMs. Most recently, OnePlus was reportedly forced to move the launch of its upcoming OnePlus 8 flagship online-only. Ordinarily, the company launches its devices via a live event and then later online for a secondary variant online. This year, that’s expected to be online-only across the board.
Perhaps more severe, Samsung reportedly believes that lower-than-expected sales of its brand new Galaxy S20 series can be blamed on coronavirus. The flagships put out by the company are typically expected to lead sales figures for the Android market starting very early from their respective launch. This year, those figures have declined dramatically as compared to expectations.
Samsung cites two reasons for its figures being down. It says sales were first affected by sharp declines in discounts for new phones. That likely comes down to discounts on phones from other brands but also steep discounts on its own previous flagships. But the company also blames declines in the number of visitors to offline stores due to coronavirus infection fears.
What does this mean for Foxconn’s position in the industry?
Foxconn is most well-known for its production of Apple-branded handsets. But that’s not the only set of devices it has traditionally built. The firm has also been responsible for a wide number of Android handsets and other devices. Those have ranged from Pixel devices to game consoles, typically limited to those companies that don’t have the production facilities to build their own devices.
As noted above, the coronavirus outbreak in China has implications far beyond that region. So the setback won’t necessarily cause disproportionate harm for Foxconn. Instead, it will be an impact spread across the industry. Foxconn’s “long-term cooperation” with suppliers and other partners in the industry should also prove useful in that regard.