The telecommunications and consumer technology industries continue to feel the impact of the coronavirus.
The initial outbreak of the coronavirus in China disrupted global supply chains, but as the outbreak has grown into a global pandemic, with over 125,000 confirmed cases across 118 countries, the consequences have become even more far-reaching and less predictable.
Mobile World Congress, a seminal conference in the telecommunications industry, was among the first in a string of industry conferences and keynotes to be canceled as part of containment efforts. And as more employees are being asked to work remotely, the industry faces the prospect of delayed initiatives and missed partnership opportunities.
But the telecommunications and technology industries have also found opportunities to help with what matters most — keeping people safe and healthy — by aiding companies that are scrambling to make videoconferencing technology more broadly available, assisting governments disseminate accurate information to citizens about the virus, and finding uses for smart city technologies to combat the pandemic.
Here are five ways we expect the coronavirus to affect the industry over the coming year:
1) The clearest and most immediate business impact of the coronavirus pandemic was a major disruption to supply chains.
Having originated in China, the region was hit hard as a large number of citizens contracted the disease and many were forced into quarantine. This led to partial and full shutdowns of plants and factories, some of which were being used by prominent technology companies to manufacture their goods and products. For example, Apple experienced shortages on its iPhone supply as a result of the company’s primary manufacturer, Foxconn, shutting down much of its production in China.
Ultimately for Apple, this will lead to a significantly reduced forecast in iPhone shipments through Q1 — by as much as 10%, according to estimates by Apple analyst Ming-Chi Kuo cited by MacRumors. And while companies often have contingency plans, which revolve around ramping up production in a region that isn’t impacted, the rapid spread of the coronavirus across the globe makes it very difficult to pinpoint which regions would be least affected. Even then, the momentum and resources of the Chinese economy will not be easily replicated — “Made in China” initiatives have seen the government invest billions in advanced manufacturing sectors including telecommunications equipment and semiconductors.
2) The spread of the coronavirus caused several of the most important tech conferences to be canceled, likely resulting in numerous missed partnership opportunities.
Most notably, Mobile World Congress (MWC), which was set to take place February 24-27 in Barcelona, was canceled due to concerns over the virus. MWC is a cornerstone event in the connectivity industry as it brings together the most important companies in the space to network, share innovations, and forge new business partnerships. Several companies rescheduled the events they had planned for MWC, but the continued presence of the coronavirus led others to cancel them entirely.
Beyond MWC, Facebook canceled its F8 Developer Conference and Global Marketing Summit, Google shifted its Google Cloud Next event to online only, and IBM likewise had to livestream its developer’s conference, which last year hosted over 30,000 attendees. Altogether, the cancellation of major tech events has incurred over $1 billion in direct economic losses, according to estimates from PredictHQ cited by Recode.
Online alternatives helped limit the fallout from canceled conferences, but tech industries will likely still suffer a period of stifled innovation due to forgone in-person business opportunities. Conference attendees do not have the same opportunities to network via livestreaming as they do attending in-person events. It would be harder for marketers to casually share best practices over the livestreamed Facebook Global Marketing Summit, for instance, than it would be if the event actually took place. Though it is difficult to quantify the value of these chance encounters or informal network sessions, the effects will undoubtedly be felt throughout the impacted industries.
3) The growing need for remote interactions amid the coronavirus pandemic has highlighted a need for 5G technology, potentially accelerating adoption in the long term.
5G’s lightning-fast speeds, near-instantaneous communications, and increased connection density makes it primed for remote interactions, which has become top of mind for many organizations and enterprises as caution mounts over the spread of the virus. Two key areas — telehealth and teleconferencing — are becoming critical for enterprise operations amid the pandemic, and we think that increased dependence on these areas will help strengthen the appeal of 5G:
- Telehealth: The technical superiority of the new standard empowers physicians to diagnose, treat, and operate on patients without the need to be physically near them. We’ve already seen such use cases for 5G to combat coronavirus in China: In January, telecoms ZTE and China Telecom designed a 5G-powered system that enables remote consultations and diagnoses of the virus by connecting physicians at West China Hospital to 27 hospitals treating infected patients. Given the ability of 5G to expand the reach of expertise and services offered by hospitals in this time of increased need, we expect more hospitals will look to tap into 5G to take advantage of the benefits offered by the new standard.
- Teleconferencing: Many employers have increased their reliance on enterprise teleconferencing tools — such as Microsoft Teams, Google Hangouts, and Zoom — as their employees switch to remote work due to public health concerns. We expect that employers’ dependence on such tools during the coronavirus pandemic will strengthen the case for 5G connectivity in the home — and in the office as enterprises recognize the value that teleconferencing tools offer. That’s because a 5G connection will be able to provide real-time and uninterrupted communication that’s not possible with most wired connections today.
4) The coronavirus could highlight possible use cases for virtual reality (VR) in enterprises, boosting the technology’s uptake.
The outbreaks of coronavirus have caused big tech companies like Apple, Google, and Microsoft to recommend or mandate that employees work from home. Additionally, companies like Amazon have limited nonessential employee travel to affected areas like China, Italy, and even within the US. While this is the safest course of action during the pandemic, it does inhibit collaborative efforts and opportunities for hands-on training. As these drawbacks become clearer enterprises will look for ways to smooth disruptions for employees, and one way will likely be VR.
Companies already have been identified VR as a tool to improve employee training, but the coronavirus could prove to be the impetus for some workplaces to implement the technology. Almost half (49%) of business respondents are looking to use VR and other extended reality tools to mirror real-world training conditions, according to a Perkins Coie survey. If kept at home, employees can keep their skills sharp with hands-on tutorials which previously may have only been available in a workplace setting. For instance, a technician can practice repairing industrial equipment without leaving their home. Additionally, a wider range of meetings can be held remotely through VR, as workers can better view and share complex ideas like prototype designs — 20% of employees identify communication and collaboration as their biggest struggle with working remotely.
5) Investment in smart city solutions will continue to grow as the tech has proven to be a valuable tool in crisis management.
Cities around the world have utilized smart city technology in attempts to mitigate the impact of coronavirus. Police in China are using drones with thermal sensors to identify people in public running a fever. The South Korean government developed a smartphone app that puts self-quarantined individuals in touch with caseworkers, allowing them to report their progress and ask any questions that arise. The Australian government launched a chatbot to address citizen questions and quell the spread of disinformation.
While these solutions are far-reaching, they all fall within the domain of smart cities, proving the space to be a worthwhile investment in a time of crisis. Most smart city solutions are intended to support the day-to-day operations of a city. But that underlying infrastructure — whether it be city-wide connectivity, surveillance systems, or citizen communication platforms — can be adapted to meet the needs of a government in a time of crisis, as the coronavirus has demonstrated. Business Insider Intelligence estimates that smart city investment will reach $295 billion by 2025, up from $131 billion in 2020. Should smart city solutions prove to be an effective tool at mitigating the pandemic, governments may feel even greater certainty in making further investment, which could accelerate the rate at which they deploy solutions.