Xerox will prioritize the health and safety of its employees, customers, partners and affiliates above other considerations, “including its proposal to acquire HP,” said CEO John Visentin Friday. His company will delay releases of presentations, media interviews and meetings with HP shareholders to focus on resources to protect the company’s various stakeholders from the coronavirus pandemic. Xerox offered to buy HP for $24 a share Feb. 10, a price “not in the best interest of HP shareholders,” says HP CEO Enrique Lores (see 2002250008). Xerox “does not consider the market decline since the date of its offer” -- or the temporary suspension of trading in HP shares Tuesday and Thursday as a result of marketwide circuit breaker procedures -- to constitute a failure of any condition to its offer to acquire HP,” said the company.
IFA organizers extended by a month to April 30 their “early bird” 10% discount offer to exhibitors that book space at the Sept. 24-26 CE China show in Guangzhou, they said Friday. “Preparations for CE China 2020 run on high speed and we are looking forward to welcoming you in Guangzhou,” they said, with no mention of how the coronavirus factored into the deadline extension. Promoters said last month they weren’t sure if the early bird offer would be extended (see 2002060011). Guangzhou is about 600 miles south of Wuhan, COVID-19's original epicenter. CTA earlier last week postponed indefinitely its June 10-12 CES Asia show in Shanghai, about 500 miles east of Wuhan.
Coronavirus disruptions are expected to cause a $20 billion revenue hit for the global smart home category, reported Omdia Friday. The market is pegged at $101.1 billion for 2020 compared with a previous projection of $120.6 billion, said the research firm. Smart home device shipments are estimated at 603.5 million units vs. 693.5 million previously forecast. The smart home market “tends to be more resilient” during economic challenges vs. less diversified categories, said analyst Blake Kozak, but it, too, will undergo a correction this year. Asia will have the biggest slowdown, equating to $7.8 billion and 66.2 million fewer shipments than originally forecast, it said. Production should ramp up as the Asia region recovers from the pandemic, but depleted inventories could add strain to potentially lower demand. In the U.S., Omdia cut the smart home revenue outlook 10.6%, though device growth is forecast to remain stronger than in other countries. But it cautioned U.S. growth projections could be reduced further if stock markets don’t rebound or if the virus spreads, affecting U.S. supply chains. In areas of the U.S. with high rates of contagion, the number of professional smart home installations could be reduced, it said, and the capability to either ship and deliver products or to install devices could be "drastically diminished."
Prevent “deceptive advertising and dangerous misinformation related to the coronavirus global pandemic,” House Commerce Committee Democrats wrote FTC Chairman Joe Simons Friday. They cited reports about online products on platforms “making false claims related to their ability to cure, treat and prevent coronavirus.” House Commerce Committee Chairman Frank Pallone, D-N.J.; House Consumer Protection Subcommittee Chair Jan Schakowsky, D-Ill.; and House Oversight and Investigations Subcommittee Chair Diana DeGette, D-Colo., signed. The agency didn’t comment.
Apple's June Worldwide Developer Conference will be held online, with content available for consumers, media and developers, said Phil Schiller, senior vice president-worldwide marketing, Friday, citing global health concerns. Developers will get "early access" to the future of iOS, iPadOS, macOS, watchOS and tvOS, and be able to engage with Apple engineers, said the company. Apple is committing $1 million to local San Jose organizations to offset associated revenue loss due to the online format, it said. The company didn't respond to questions.
T.H.E. Show 2020, scheduled for June 12-14 in Long Beach, California, will be held as planned, show organizers emailed Thursday in response to questions from attendees, exhibitors, press and VIPs. With 90 days before the consumer high-end audio show, organizers sought to address “buzzing rumors, some new information, as well as misinformation traveling around in certain audio circles” about whether the show will go on as planned due to coronavirus concerns. Organizers are taking concerns seriously and monitoring updates from the Centers for Disease Control and Prevention, the World Health Organization, and regional and local health and government agencies, they said, also acknowledging “things can change from minute to minute.” In a time of “growing panic,” the show was advised by “multiple health experts” to focus on preparedness, keeping calm and vetting information through “a variety of sources.” Organizers are taking into consideration the three-month window “until current show dates” and are aware of the many cancellations and postponements of other shows taking place within the next 30-45 days. “Many of our exhibitors are small businesses and boutique showrooms run by families and/or long-time friends and business partners,” they said. “While T.H.E Show is growing, we too, are a family and a small business enterprise,” they said, confirming their commitment to “put on the very best show for you we can this year and look forward to seeing you all soon.” As of Thursday, 42 display areas of the six-floor Long Beach Hilton exhibit space had been sold; 41 remained available. Available exhibit space started at $3,200 for a 364-square-foot room.
The coronavirus is taking a toll on IT markets, with buyers and vendors adjusting “to a new set of assumptions and a new global economic reality,” reported International Data Corp. Wednesday. The researcher expects a “significant slowdown in spending on hardware in particular” during the first half, with software and services spending also hit from effects reverberating through supply chains, trade and business planning. A “pessimistic scenario” plots 1% IT spending growth for the year vs. an original forecast of more than 4%: “These forecasts are more likely to trend down than up in the next few weeks,” it said. IDC estimates February IT spending grew 4.3% in constant currency terms, down from a 5% projection, reflecting lowered device sales. Strong PC sales in Q4 gave way to a smartphone upgrade cycle driven by 5G, it said. Analyst Stephen Minton called the situation “extremely fluid.”
Contrary to popular belief that Netflix will be a “beneficiary” of COVID-19 because audiences will spend more time at home watching, Needham thinks the outbreak is “bad news” for the streaming service, said a Tuesday research note. Netflix charges a fixed monthly fee, “and does not benefit economically from additional viewing hours,” it said. The fixed price is $9-$16 monthly in the U.S. Netflix needs to cut its monthly fees to $5-$7 a month to compete with new streaming competitors at that price point, the analyst said. Subsidizing that with a new “ad-driven tier” means “more viewing hours for any reason would allow NFLX shareholders to participate in revenue upside,” the firm said. Needham worries overseas subscription and revenue growth “are increasingly at risk as COVID-19 spreads,” because Netflix is “a luxury at a time when paychecks from employment may have stopped.”
Best Buy put “strict” employee travel policies in place and “canceled meetings with large gatherings” to do what it can to help prevent coronavirus spread, said a customer notice Tuesday. It offered to reschedule in-home consultations, deliveries, installations or repairs. “For in-home consultations, we offer options for phone or video conversations with our experts if you so choose,” it said. Stores will have “ramped up cleaning services,” adding hand sanitizer dispensers at entrances and all cash registers, the company said. “Sanitizing wipes are near workstations and counters so that employees can keep them continuously cleaned.”
The COVID-19 outbreak will have “a longer and larger impact” on imports at major U.S. retail container ports than previously thought, said the National Retail Federation Monday. “Factory shutdowns and travel restrictions in China continue to affect production,” it said. Though plants continue to come back online, “there are still issues affecting cargo movement, including the availability of truck drivers to move cargo to Chinese ports,” it said. “Uncertainty has expanded exponentially.” NRF canvassed its membership and found 40% are seeing disruptions to their supply chains, and another 26% “expect to see disruptions as the situation continues,” it said. U.S. retail ports handled 1.82 million 20-foot-long cargo containers or their equivalents in January, up 5.7% from December, but down 3.8% from January 2019, when the Section 301 tariffs spurred “unusually high numbers” of imports, said NRF. It estimates February port activity will be 12.6% lower than a year earlier and is forecasting an 18.3% decline in year-over-year March volume.