Impact of Coronavirus on Tech Industry

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Coronavirus Impact on Tech Industry

The novel coronavirus, or COVID-19, caused by the virus, named as SARS-CoV-2, has now spread to 93 counties and affected more than 100,000 people across the globe. The fact that this outbreak started in China, world’s second-largest economy and a manufacturing giant, and then spread to so many countries within this short period has had a huge effect on almost all the industries.

The technology industry is one of the industries that has considerably affected by the outbreak of coronavirus. With factories majorly closed in China, there has been a direct impact on the production of electronic goods, which in turn in the value chain has adversely affected the major tech giants of the world. The Big Tech stocks have already lost more than $230 million dollars since the outbreak.

Apple has its largest exposure in China, where it not only relies on manufacturing but also on consumers for its star product – the iPhone. Even though the company is looking for other alternatives to bridge this supply-chain gap, the expected sales for the quarter is definitely going to take a hit, as have been publicly announced by the company. Xiomi and Huawei are expected to face a similar situation.

Microsoft has also issued a financial warning because of the pandemic. Even though China accounts for less than two percent of the company’s revenue, Microsoft expects lower sales compared to that declared only a month ago. Tesla, Amazon, Facebook and Google’s parent company Alphabet shares are also bleeding amid a broader market sell-off driven by the concerns of investors.

Some companies are taking preventive measures to keep their employees as safe as possible. Organizers of MWC Barcelona, the annual global telecommunications trade show in Spain, have called off the event. IBM, Verizon and AT&T pulled out of RSA security conference held in San Francisco. Facebook cancelled its annual F8 conference. Corporate offices, manufacturing factories and retail stores of Apple, Samsung, Microsoft, Tesla and Google have been temporarily shut down in China, with employees warned against nonessential travels to the country.

However, a few companies have gained due to the outbreak. One such example is Zoom, the teleconferencing software company. Shares of Zoom are skyrocketing as more and more white-collar workers telecommuting from home. Netflix stocks have also been quite bullish recently as online content consumption has risen considerably with more people are staying back home. From a broader perspective, the coronavirus has definitely created a dent in the tech industry, however temporary it might be.