Gartner: Smartphone shipments nose-dived 20% during Q1

Smartphone shipments have been slashed across the industry during the first three months of 2020, though Xiaomi managed to post some year-on-year growth.

It might have only been marginal, a far shot from what the management team would have expected as this point last year, but a 1.4% year-on-year increase for Xiaomi shipments was as good as it got for the worlds’ leading smartphone manufacturers.

“The coronavirus pandemic caused the global smartphone market to experience its worst decline ever,” said Anshul Gupta of Gartner. “Most of the leading Chinese manufacturers and Apple were severely impacted by the temporary closures of their factories in China and reduced consumer spending due to the global shelter-in-place.”

Manufacturer Market share Year-on-year shipments
Samsung 18.5% -22.7%
Huawei 14.2% -27.3%
Apple 13.7% -8.2%
Xiaomi 9.3% 1.4%
OPPO 8% -24.2%
Others 36.3% -24.2%

Perhaps the most worrying aspect of this report from Gartner is the anticipation of the next one. Let’s not forget, the vast majority of societal lockdown procedures started during the latter stages of Q1 and continued through the majority of Q2. With economies beginning to reopen, consumer confidence is likely to be very low, resulting in delays to big ticket purchases. The smartphone slowdown is highly likely to extend throughout Q2, possibly pushing into the next quarter.

As one would expect, the fortunes of the different players are quite varied.

“Huawei will have a challenging year,” Gupta said. “It has developed the Huawei Mobile Service (HMS) ecosystem, but with the lack of popular Google apps and Google Play store, Huawei is unlikely to attract new smartphone buyers in international markets.”

For Huawei, trust and credibility are big factors. Yes, it has a solid reputation for manufacturing smartphones, but hardware is very different to software. It has an uphill battle to convince customers, both old and new, that its devices will deliver the desired experience without the Android ecosystem to underpin it.

Apple on the other hand, has a lot to be excited about.

In September (or October, if you believe the rumours), the iGiant will unveil its own attempt to crack the 5G market. This is a moment many analysts have been looking forward to, as few companies have the power to sway the opinions of the masses like Apple does. This launch could push 5G into the mainstream markets, such is the loyalty of Apple customers.

OPPO is an interesting company as it has been credited as one of the better performers when it comes to offline distribution and sales, though that was obviously severely distributed by COVID-19. This is a wake-up call, with the team needing to reinforce its online presence to ensure greater resiliency.

2020 is going to be a very tough year for the smartphone manufacturers and any company where products or services would be considered an expensive luxury. The damage inflicted to the industry during this pandemic will not be limited to Q1, though recovery could certainly be varied.

Apple has a lot to look forward to, though September might not come soon enough, as perhaps a major event is what the industry needs. Something to inspire the consumer and reinvigorate enthusiasm in technology purchases while pushing 5G into the mainstream market. Let’s hope sluggish sales trends do not drag through to September, but it is a very realistic possibility.

Global smartphone shipments fall by 17% coz of coronavirus

The latest smartphone shipment numbers from Strategy Analytics reveal an unprecedented drop that can only be due to the COVID-19 pandemic.

Total shipments of 274.8 million units in the first quarter of this year represent a 16.8% decline on the year-ago total. No vendors were spared the austerity, bar Xiaomi, which at least managed to tread water thanks to its Indian presence. Apple declined the least out of the big three, so has gained a chunk of global market share compared to Q1 2019.

“As expected, the global smartphone market delivered its worst performance since records began,” said Linda Sui of SA. “Demand for smartphones slammed to a halt in the quarter, as the Covid-19 virus scare shut down major economies like China and shoppers placed their spending plans on hold.”

“This was Samsung’s lowest quarterly smartphone shipments for eight years,” said Neil Mawston of SA. “Despite a strong line-up of A, S and Note series models, Samsung was unable to escape the virus-led plunge in smartphone demand. Despite US-China trade wars and the Covid-19 virus scare, Huawei was able to maintain its global smartphone share at a respectable 18 percent during the quarter. China remains Huawei’s core region and most of its sales take place there.”

“Apple’s global smartphone market share has risen from 13 percent to 14 percent in the past year,” said Woody Oh of SA. “Apple’s new iPhone SE model with lower pricing and larger presence in emerging markets like India will give volumes a further bump in the coming months.”

If the production forecast is anything to go by, the global smartphone numbers could be even worse next quarter. Supply chains are disrupted and discretionary consumer spend has gone down the toilet, while everyone sits tight and waits to see how things will play out. As with so many other industries, the smartphone sector will have its fingers crossed for an explosion of pent-up demand in the second half of this year.

Incidentally, other analyst firms are increasingly publishing their numbers on the same day as SA, which we use as our primary source. It’s interesting to see how their estimates vary, so we’ve copied the Omdia and IDC tables below too.

Chinese smartphone sales plummet

The latest numbers from Counterpoint Research reveal Q1 2020 smartphone sales in China plunged by 22%.

Somehow Huawei managed to buck that trend, however, as it continues to go from strength to strength in its home market. The table below reveals all of Huawei’s Android competitors experienced annual sales declines of between 27% and 40%, yet Huawei miraculously increased its smartphones sales by 6%. Looks like all that R&D spend is really paying off! Meanwhile Apple held firm as rich people continued to be rich.

“The drastic fall in Q1 China market was primarily dragged down by the dismal sales of smartphones in February (-35% YoY), when the country was severely impacted by the COVID-19 pandemic and commerce activities were minimal,” said Flora Tang of Counterpoint. “However, during the lockdown period in China, local e-Commerce giants such as Alibaba and JD.com managed to sustain efficient business operations and delivery services in major Chinese cities outside of Hubei province.

“For the strong support from these e-Commerce players, China’s smartphone sales appeared less negative than our original expectation.  We also estimate that the online share of smartphone sales in China surged to over 50% during Q1, from about 30% in 2019, though the share is likely to drop in Q2 after the pandemic is largely contained.”

“iPhone 11 was the best-selling smartphone model in Q1; it has topped China’s best-selling models list for 7 consecutive months,” said Ethan Qi of Counterpoint. “Consumers continued to purchase iPhones from e-commerce platforms despite the shutdown of Apple stores across China during February. As for the Huawei group, it continued to lead and gained share with a complete product portfolio covering the entry-level to premium segments. Huawei Mate 30 5G, Mate 30 Pro 5G, Huawei Nova 6 5G, and HONOR 9X were all among the top-selling models list during the quarter.”

On reason for Huawei’s exceptional performance could be its early entry into the 5G market. According to Counterpoint that market alone grew by 120%, compared to Q4 2019. “The dominance of Huawei in China’s 5G smartphone market was more evident— it contributed to over half of the total 5G phone sales in Q1, followed by Vivo, OPPO, and Xiaomi,” said Mengmeng Zheng of Counterpoint.

“By Q1 2020, various vendors had launched the sub-US$400 5G smartphones in China, such as Vivo Z6 5G, Xiaomi K30 5G, realme X50 5G, and ZTE AXON 11 5G. For the aggressiveness of Chinese OEMs to grow the penetration of 5G phones to lower-tier price bands, we expect 5G smartphones to rise to account for over 40% of total smartphone sales in China by the end of 2020.”

Despite that, Huawei was still in second place globally in terms of Q1 5G phone sales, according to Strategy Analytics. “Samsung vaulted into the lead in Q1 2020, shipping 8.3 million 5G smartphones globally in Q1 2020,” said Ville-Petteri Ukonaho of SA. “Samsung has strong global distribution networks and operator partnerships and new 5G smartphones in Q1 2020. Nearly all of Huawei’s 5G smartphones were shipped in China.”

“Chinese smartphone vendors captured 61 percent of top 5 vendor 5G smartphone shipment volumes in Q1 2020, with the majority of those volumes going to the Chinese market,” said Neil Mawston of SA. “This reflects the speed with which Chinese operators have rolled out 5G networks, as well as the underlying demand for 5G smartphones, despite the Covid-19 pandemic that shut down large parts of China during the Q1 2020 period. As China continues to ramp up economic activity, we expect 5G shipments to this market to continue to expand dramatically in 2020.”

Here’s the SA Q1 table. They might want to have a rethink about that moody bold font.

Samsung warns of worrying H2 as COVID-19 wobbles spreadsheets

Samsung has unveiled its quarterly figures for the three months ending March 31, which looked pretty positive, though there has been a dire warning for the rest of the year.

With the vast majority of the Samsung business reliant on consumer confidence, a prolonged outbreak would present problems for the team. Smartphone sales have been forecast a decline over the coming months, while the prospect of a recession would be a very worrying sign for the consumer electronics unit.

But looking at the most recent three months, executives highlighted trading was relatively positive until the beginning of March, where the coronavirus outbreak dented sales. Total revenues for the three-month period stood at 55.33 trillion Korean Won, an increase of 6% year-on-year.

Samsung quarterly revenues by business (Korean Won, Trillions)
Category Revenue Year-on-year Profit Year-on-year
Consumer Electronics 10.30 +1% 0.45 -12%
IT and Mobile Communications 26.00 -4% 2.65 +16%
Device Solutions 24.13 +17% 3.72 +5%

The only business unit which demonstrated a year-on-year decline for this period was IT and Mobile Communications, though executives seem positive about performance with a wider portfolio of smartphone products and a network infrastructure business unit which is starting to gather momentum.

Smartphone demand might have been expected to bounce back over the remainder of the year, though COVID-19 has limited opportunities, however there is certainly potential for the network infrastructure team.

Samsung might well be one of the biggest beneficiaries of US aggression towards China, as well as European desire to introduce greater variety in the supply chain. The Radio Access Network (RAN) segment of the telco ecosystem is incredibly streamlined already but removing (or limiting) the Chinese vendors presents opportunity for rivals. We’re not including OpenRAN for the moment as it is seemingly not deemed market ready, leaving Samsung as one of the few remaining options.

Although there might be delays in investment for 5G infrastructure over the short-term, for H2 there should be more opportunity. South Korea is a hot pocket of 5G activity as one of the leading nations for adoption, while a contract with KDDI in Japan, the three major MNOs in the US and ties to Telefonica in Europe gives Samsung momentum in the 5G RAN game.

Kim Young-ki, who leads Samsung’s networking business, believes a 20% market share for 5G RAN is possible, and while this represents a significant uplift from its 6% share of 4G RAN, it has started well. Anti-China rhetoric around the world and a European desire for supply chain diversity are two trends which certainly help the cause.

While this is a business unit which looks like it could make positive moves, it should also be noted that the vast majority of the Samsung business is going to face considerable pressure.

Smartphone demand will dampen with the high street closed, while the flagship 5G devices look less appealing as network deployment slows. The semiconductor and components business unit is reliant on consumer electronics demand, and while the memory products might be doing well due to increased PC and laptop demand, this is only a fragment of the overall equation. Consumer electronics, in particular high-end TVs, are facing a monumental headache, as the longer the coronavirus pandemic persists, the greater the likelihood of a recession.

Overall, the first quarter of 2020 was positive for Samsung and while there are some pockets of promise, the risks are far more weighty.

Samsung claims new 5G speed record

Samsung Electronics says it managed to hit 8.5 Gbps over 5G in a lab, using 800 MHz of millimetre-wave spectrum over a couple of devices.

Using one Samsung 5G access unit, Samsung beamed a fat pipe of data to two test devices, then added up the total data rates to get to the 8.5 Gbps total. The key underlying technologies were carrier aggregation and MU-MIMO (Multi-User, Multiple-Input, Multiple-Output). Samsung is heralding this as an illustration of how great 5G over mmWave is, but let’s see them replicate those kinds of data rates in the wild.

“Samsung will continue to be at the forefront in advancing 5G mmWave technology,” said Hyunho Park, SVP of the Networks Business at Samsung Electronics. “This successful demonstration proves mmWave’s potential to deliver new kinds of business use cases and open up opportunities for mobile operators. We look forward to building on this significant technical breakthrough to fuel our continuous journey towards an innovative and vibrant mmWave ecosystem.”

There’s not a lot else to say about the landmark, other than what it says about Samsung’s competitiveness in the 5G networks space. With Huawei coming under increasing pressure in these fractious times, there will be plenty of opportunities for Samsung to increase its share of the networking market. Here’s a vid to prove it’s legit.

Samsung introduces new affordable 5G smartphones

Samsung has added 5G to two of its A-series smartphones, aiming to bring 5G smartphones to the mainstream segment.

Though it is becoming more popular, 5G smartphone is still viewed as premium for early adopters. However, the two new products launched by Samsung today are of a distinctly different category. The A-series in Samsung’s Galaxy portfolio is positioned as more value for money and targeted at the lower-end segment. Products of this series come with decent enough specs but not priced at the top end.

“Our ambition with the Galaxy A series portfolio is to deliver must-have innovations, and powerful experiences, at a varied range of prices but without compromising on features” said YeonJeong Kim, Vice President, Head of Innovative Product Planning Group, Mobile Communications Business at Samsung Electronics. “I’m excited today to be announcing the next step in our journey with the Galaxy A71 5G and Galaxy A51 5G. These devices are designed for the era of 5G, and are part of our ongoing commitment to deliver next-generation connectivity to more people, by building 5G into our diverse smartphone portfolio, at more accessible price points.”

The specs of the two new phones are rather similar, albeit that the Galaxy A71 5G (pictured) comes with a slightly bigger and better display, slightly more powerful main camera, and faster charging. Both are built on existing chassis: the LTE versions of the A71 and A51 were launched in December 2019.

The new 5G iterations of the products use Samsung’s own first generation 5G SoC, the 8nm Exynos 980 launched in the second half of last year (while the LTE version was using Qualcomm’s Snapdragon 730 platform).

Both new phones will come with Samsung services and applications preinstalled, including Bixby (Vision, Lens Mode, Routines), Samsung Pay where applicable, and Samsung Health. They will also be equipped with Samsung Knox, the company’s own security software. Samsung does not specify when and where the products will be available, nor their prices.

There are quite a few 5G smartphone launches that we haven’t seen, due to the onslaught of COVID-19. Companies like Huawei and Xiaomi have moved their events online, but these were mainly for flagship products. Meanwhile, more and more OEMs are bringing 5G to the affordable, mainstream segment. Only a couple of days ago the Chinese phone maker TCL launched a £399 5G smartphone of its own, built on Qualcomm’s mid-range 5G SoC, Snapdragon 765.

The affordable 5G segment is further bolstered by the competing solution from MediaTek, the Dimensity 800. These mid-range 5G SoC’s, including Samsung’s own Exynos 980, are likely to bring the mainstream 5G smartphones down to the $500 retail price point, which will be “the sweet spot for 5G Android smartphone takeoff,” as Neil Mawston from Strategy Analytics told Telecoms.com separately.

“This is when 5G phones become affordable to more than half of consumers in developed markets like Europe,” Mawston said.

What a Wonderful World of 5G Devices

Many brands have already brought to market large numbers of 5G devices, such as smartphones and hotspots. According to the latest tracking done by the GSA (Global mobile Suppliers Association), an industry organisation, over 250 devices had been announced by mid-March 2020, with 67 of them commercially available, including 40 smartphones. Half a year previously, the same tracking recorded only 100 public device announcements, with only nine 5G smartphones commercially available. The pace of new 5G device launches has clearly been accelerating.

(Here we are sharing the opening section of this Telecoms.com Intelligence special briefing to look into how 5G operators and device makers can work together to deliver a win-win solution to grow the 5G ecosystem.

The full version of the report is available for free to download here.)

Consumers Love 5G Smartphones, or Do They?

Even in the midst of the ongoing uncertainty of COVID-19, the smartphone marketplace has been busy. A number of flagship 5G smartphones have been launched by companies like Samsung and Huawei as well as their challengers, most of which had been meant to be unveiled at this year’s Mobile World Congress that did not happen. Many companies have moved their launch events online.

Consumers have signed up to 5G services faster than they did 4G. South Korea clocked up 5 million 5G subscribers by the end of 2019, eight months after the three operators switched on their 5G networks. China’s total number of 5G subscribers topped 10 million by the end of 2019, only two months after the three operators launched 5G in the world’s biggest smartphone market. China Mobile, the world’s largest mobile operator by subscriber number, reported that it had attracted 15.4 million 5G customers by the end of February, four months after launch. Despite that few if any other operators have published their 5G subscriber numbers, the momentum is there.

So far, 5G device shipment numbers have been strong. The research firm Strategy Analytics estimated that 19 million 5G smartphones were shipped in 2019. This was higher than most analysts had expected. So, at the first sight at least, consumers have shown strong enthusiasm in embracing 5G smartphones. Meanwhile, some evidence is showing that consumers have bought 5G smartphones not necessarily for 5G, or at least not the 5G the industry professionals would define it.

A research recently published by the software company Amdocs found that over a third of British consumers are interested in upgrading to 5G devices this year, but most of them are not sure what 5G is all about. The minority of consumers that claimed to know 5G would primarily cite faster internet. However, if the consumers take operators’ “gigabit speed” promise literally, they will be disappointed.

The network benchmarking and testing firm Global Wireless Solutions conducted a field test of the 5G networks in the centre of London towards the end of last year. The highest download speed of 470 Mbps was recorded on EE network, while the lower speeds of 330 Mbps and 320 Mbps were recorded on O2 and Vodafone networks respectively. These numbers, in addition to falling far short of “gigabit”, could only be achieved if the customer stood next to the base stations. Even those consumers well versed enough to quote buzz words like “low latency” would also be disappointed. The Global Wireless Solutions tests have found no meaningful improvement in latency from 4G connectivity.

This is an indication that the success to expand 5G adoption from early adopters to early majority is far from certain. While operators are honing their skills to convince consumers of 5G benefits, device makers, in particular smartphone brands, would also have much to lose if consumer enthusiasm should dampen by the underwhelming experience and patchy coverage.

To explore the topic further, the rest of this report first discusses what operators are looking for in 5G devices. We then analyse the key drivers for higher consumer adoption of 5G devices, including the underlying technologies. The report concludes by looking at the leading trends in the 5G device market in the next two to three years.

The rest of the report include these sections:

  • Do Not Ask What Operators Can Do For You, Ask What You Can Do For the Operators
  • What Is Happening Under the Hood?
  • Plenty To Look Forward To
  • Q&A with Daniel Gleeson, Principal Analyst, Omdia
  • Additional Resources

The full version of the report is available for free to download here.

Patent troll sets its sights on Amazon, LG, Apple, Microsoft and more

Several technology companies have been told they are at the centre of a patent complaint concerning touchscreen technology, filed by Ireland’s Neodron.

Although there is little information regarding Neodron as a company, it appears to be what some would describe as a patent troll. Having been founded in December 2018 after purchasing the patents in question, there seems to be little other point to the business than to squeeze the technology giants for licence fees. The investigation will focus on Section 337, known as ‘Unfair Import Investigations’.

Having filed the complaint with the US International Trade Commission (USITC) on February 14, the authority will now begin an investigation into the matter. The companies which will come under the microscope are Amazon, Apple, ASUS, LG, Microsoft, Motorola, Samsung and Sony.

The investigation will concern four patents relating to the touchscreen functionality of various smartphone, tablets and laptops:

US Patent No. 7,821,425

Prevents ‘key overlap’ by measuring signal strength associated with each key on the screen, mitigating confusion should a user’ finger overlap from a desired key to onto adjacent ones.

US Patent No. 7,903,092

Another patent to prevent ‘key overlap’ though this one allows for certain keys to be supressed should the user persistently wrongly select it

US Patent No. 8,749,251

Effectively measures the amount of time in which a key has been pressed, and, if the amount of time that has elapsed exceeds a predetermined time duration, a particular function or feature is initiated

US Patent No. 9,411,472

A method to measure and store the data associated with touch sensors. Also includes methods to access a stored threshold value, determine the strength of a charge return path between the touch sensor and a ground, and adjust the stored threshold value

While it is hardly uncommon for companies to prod and probe in pursuit of licensing fees associated with technology patents, the fact this complaint has been escalated to an investigation suggests there could be some credibility. For every investigation which is announced by the USITC, there are numerous complaints which are dismissed. And this is not the first time Neodron has been in the headlines as a Patent Troll.

Last year, several US companies were targeted for a similar series of patents. Samsung, Amazon, Microsoft, Dell, HP, Lenovo and Motorola were the respondents during that investigation. This investigation is scheduled to end on March 27 and is focused on four different patents; US Patent No. 8,432,173; 8,791,910; 9,024,790; 9,372,580. These patents are also focused on touchscreen technologies, though more directional related than pressure.

Should Neodron be successful in its venture it could prevent the import and/or sale of devices which are in breach of the patent, though we suspect that a large enough cheque might make the complaints disappear.

Samsung gets a 5G Spark in New Zealand

Korean tech giant Samsung has scored a much needed 5G deal win with Kiwi operator Spark.

Every day we hear about the latest 5G-related achievement from Nokia, Ericsson and Huawei. Even ZTE seems to be rediscovering its mojo after the traumas of 2018. But it’s easy to forget that Samsung has a networking division to go with nearly every other part of the tech and industrial world it seems to have a toehold in.

So it almost came as a surprise to hear that Spark, which vies with Vodafone for be the number one MNO in New Zealand, is getting Samsung involved in building its 5G network. Spark has been trying out Samsung’s ‘end-to-end’ gear for 5G testing for a year or so. The narrative would have us believe that the trials went so well, Spark decided to double down on Samsung, which will now be providing it with 5G NR massive MIMO radios.

“We are pleased to have Samsung as a 5G vendor for our mobile services,” said Rajesh Singh, General Manager of Value Management of Spark New Zealand. “Not only are they able to offer us a huge amount of global best practice and network infrastructure knowledge, they can also provide a proven immersive 5G experience for our customers. One of the main reasons we selected Samsung was their 5G NR solutions which deliver enhanced network capability, high quality connections, and state of the art technology.”

“We are excited to begin this collaboration with Spark, which is a big step in bringing the power of 5G to New Zealand,” said WooJune Kim, Head of Global Sales & Marketing, Networks Business at Samsung Electronics. “We are looking forward to helping Spark unlock the future of mobile connectivity, and are ready to support the new level of 5G experiences they will deliver to their customers with our next generation network solution.”

Samsung has been getting lots of 5G work in South Korea, which seems to be giving it a good shop window to the rest of the world. With Chinese vendors being treated with caution by any country that wants to stay in America’s good books, MNOs keen on maintaining their multiple network supplier strategy may be increasingly inclined to give Samsung a second look.

Coronavirus shuts down Samsung manufacturing site

Having forced the hand of the GSMA to cancel this years’ Barcelona bonanza, the coronavirus is now making itself known in Korea.

While the majority of a Samsung factory is now open, the floor where in infected employee worked will remain closed until the morning of February 25, according to Reuters. The impact should not be too significant to the Samsung business as this site only accounts for a small proportion of the total manufacturing output, it is another example of how the coronavirus outbreak could dent global supply chains.

“The company has placed colleagues who came in contact with the infected employee in self-quarantine and taken steps to have them tested for possible infection,” a spokesperson said.

Samsung might play down the impact of the closure on its business today, though it is also worth bearing in mind the coronavirus outbreak seems to be accelerating in Korea. The South Korean government has put the country on the highest threat level, after the number of cases just to 763 over the weekend.

As it stands, there has seemingly been little material impact to the industry, aside from limitations to travel and cancellations of conferences. Minimised facetime with partners and customers will of course impact business, though should manufacturing sites start to shut down, the consequences could be very expensive.

The telecoms and technology industries are under particular risk, considering the majority of manufacturing activities are concentrated in China.

“In line with recommendations from the Chinese authorities related to the Corona virus, Ericsson’s production and offices in China were closed until 9 February and this will result in limited to no impact on our customers,” an Ericsson spokesperson said.

“We continue to follow the situation and recommendation from the Chinese authorities and WHO [World Health Organisation], as we assess our supply chain.”

Ericsson is one company which is seemingly in a more comfortable position. Some products are manufactured in China, though the company also has sites in Estonia, the US and Brazil. Each of these sites can see production ramped up to compensate for any short-falling elsewhere.

As it stands there are more than 70,000 coronavirus cases in China, though the Hubei province has felt the greatest impact. Xiaomi is one company in the TMT space which has been impacted in a material way, its second headquarters is located in Wuhan, though as much of the telco industry is located in the Guangdong province, supply chain impact has been minimised for the moment.

Huawei is another company which was forced to close its doors in early February, though the company has suggested this was an extended holiday period for employees, and it is now back to 100% manufacturing capability.

“In short, we are doing an industry assessment,” said Ryan Ding, President of Huawei’s carrier business unit. “But we can say, for the next 3-6 months there will not be an impact on our global supply chain.”

Right now, the company has stockpiles of product and components which will ensure there is no complications to supply, both in terms of smartphones and telecoms network infrastructure equipment. As the sites are now functional again, it does look like the most serious consequences can be avoided, though this is based on the presumption the coronavirus outbreak will not continue to escalate.

The immediate risk to the closure of manufacturing sites is an inability to meet demands of customers with products, but also sourcing materials and components. Scarcity of components would only increase the price of products, meaning companies would have to either accept lower profit margins or pass the increased cost onto customers.

While the Chinese companies are the most obvious risk to the global supply chain, let’s not forget China is the manufacturing hub of much of the TMT industry. Ericsson, Nokia and Apple can also trace their supply chain back to Shenzhen. Currently, the delicately balanced supply chains are remaining intact, though this should be viewed as a significant risk to the telecoms industry.