“Many uncertainties” surround the coronavirus and its impact on the Chinese supply chain, said Roku’s 2019 annual report Monday. Unknown are the “scientific and health issues” about how coronavirus spreads, plus the “duration and extent of economic disruption in China and other markets,” said the 10-K filing. Coronavirus “may result in supply shortages of our products or our licensee’s products,” said Roku. “Any decrease, limitations or delays on our or our licensees’ ability to import, export, or sell our streaming devices would harm our business.” Roku players use specific SoC solutions and Wi-Fi front-end modules from various manufacturers, “for which we do not have a second source,” said the company. “Although this approach allows us to maximize player performance on lower cost hardware,” it also creates “supply chain risk,” it said. These “sole-source suppliers” may face “production, shipping, or logistical constraints” from the coronavirus outbreak, it said. “Any such interruption or delay may force us to seek similar components from alternative sources, which may not be available.” Amazon, Best Buy and Walmart collectively were 72% of Roku player revenue in 2019, up from 68% in 2018, said Roku.
Travel restrictions have meant "a select few" Satellite 2020-goers internationally had to cancel, but the satellite trade show and conference will go on as scheduled March 9-12, it emailed Monday. It said it's working with parties including the Washington Convention Center and member hotels "to ensure increased disinfection efforts, hand sanitizer stations and safety precautions." It said close to 12,000 have registered, up 9% from a year ago this time. The MWC 2020 event in Barcelona was canceled due to coronavirus concerns (see 2002120056).
The “growing concern over the coronavirus” forced Nvidia to cancel its March 22-26 GPU Technology Conference at the San Jose Convention Center and run an online event instead, blogged the company Monday. CEO Jensen Huang will still keynote, it said. “We will be working with our conference speakers to begin publishing their talks online beginning in the weeks ahead.” Registrants who paid for a conference pass will get a full refund, said Nvidia. It thanks conference participants for their “understanding during these unusual times,” it said.
Chinese tech company Baidu “open-sourced” its facial-recognition and artificial-intelligence technologies to help contain the coronavirus by deploying “fever-screening systems” in rail stations, hospitals and municipal buildings across China, said CEO Robin Li on a Q4 call Thursday. “Our systems remotely measure the temperatures of up to 200 people per minute,” including those wearing protective face masks and hats, he said. The technology also can “identify those who are not wearing masks or wearing them improperly,” he said. The “near-term impact” on the Baidu business has been negative, “as many of our top industries, such as travel, real estate, auto, health care and franchising, suffer from reduced off-line activities,” said Li. But the positive “side effect” is that people are “staying home more, and they have the opportunity to get to know Baidu's products and services better,” he said. “Search queries on coronavirus exceeded 1 billion during the Chinese New Year, as users came to Baidu for fact checking and finding more reliable information.” Baidu expects Q1 revenue down between 5% and 13% from a year earlier, said Chief Financial Officer Herman Yu. The coronavirus situation in China is “evolving, and business visibility is very limited,” he said. The Q1 forecast is based on a “current and preliminary view, which is subject to substantial uncertainty,” he said. The Chinese New Year holiday was originally scheduled to end Jan. 30, but many shops, restaurants and malls “remain closed down, as we speak,” he said. “Consequently, the rebound for online marketing after Chinese New Year has been slow this year.” Business conditions in the past two weeks “have started to pick up as people return to work,” said Yu. Baidu employees “are gradually returning to the office,” he said. “We assume businesses across China will do the same.”
The coronavirus outbreak negates the previously expected “recovery” in global smartphone shipments this year, reported IDC Thursday. It’s forecasting a 2.3% decline in 2020 to 1.3 billion: The outbreak will “stress the short-term scenario,” shipments declining 10.6% in 2020's first half. The market will return to growth in 2021, “driven by accelerated 5G efforts,” it said. “Our current forecasts are aligned with the probable scenario, which ascribes a multi-quarter recovery for manufacturing and logistics given a more gradual return of Chinese workers to factories." For the Chinese “epicenter” of the outbreak, “we forecast the domestic market to drop by nearly 40% year over year for first quarter and even with a potential March recovery it will still be difficult to reach last year's levels," said IDC.
“Growing concerns” about the coronavirus persuaded Facebook to cancel its May 5-6 “F8" developers conference in San Jose, blogged Director-Developer Platforms Konstantinos Papamiltiadis Thursday. “This was a tough call,” he said. “We explored other ways to keep the in-person part of F8, but it’s important to us to host an inclusive event and it didn’t feel right to have F8 without our international developers in attendance.” The company plans to replace the conference with “a combo of locally hosted events, videos and live streamed content,” with additional details in “coming weeks,” he said.
Chinese internet gaming and learning provider NetEase thinks it may benefit from the coronavirus outbreak as consumers are told to spend more time in their homes, said CEO William Ding on a call Wednesday about Q4 ended Dec. 31. The Chinese New Year customarily is a “high season for online entertainment,” and was even more so when the outbreak extended the holiday period, said Ding. “User metrics” have been stronger that those of previous Chinese New Year holidays, he said. “We are a firm believer that online learning actually offers a better user experience overall vis-à-vis the traditional off-line learning.” As Chinese authorities scramble to contain the spread of the coronavirus, “more and more people are now more receptive and adaptive to the online-learning model,” he said. “This virus situation is probably a catalyst to propel the overall online-learning industry.”
Business disruptions from the coronavirus outbreak prompted IDC to downgrade its 2020 forecast on shipments of personal computing devices, including desktops, notebooks, workstations and tablets. It’s now projecting global shipments will decline 9% this year to 374.2 million, it said Thursday. IDC’s Nov. 26 forecast, when the now-suspended List 4B tariffs were on the table and coronavirus wasn't in the picture, pegged a 7% fall. IDC is standing by its forecast that long-term growth will be “slightly positive,” rising at a 0.2% five-year compound annual growth rate to 377.2 million units in 2024. The coronavirus spread is “hampering supply and leading to reduced demand,” it said. The researcher forecasts the 8.2% Q1 decline will accelerate to a 12.7% decrease in Q2 “as the existing inventory of components and finished goods from the first quarter will have been depleted by" Q2. In 2020's second half, “growth rates are expected to improve though the market will remain in decline,” the firm said. "We have already forgone nearly a month of production given the two-week extension to the Lunar New Year break,” said IDC. “We expect the road to recovery for China's supply chain to be long with a slow trickle of labor back to factories in impacted provinces until May when the weather improves. Many critical components such as panels, touch sensors, and printed circuit boards come out of these impacted regions.”
Components shortages due to the coronavirus will delay Arlo's planned product launches for Q2, said CEO Matthew McRae on the company’s Monday Q4 earnings call. “Numerous” key components used in Arlo’s wireless security cameras are sourced in the affected region in China, said McRae, “and we are now seeing a shortage in these components quickly reduce our anticipated supply.” Component shortages will continue into Q2, he said. The company is working with vendors as factories work on recovery plans, and working with channel partners on “shelf dates,” McRae said, calling the coronavirus impact “temporary.” The company lowered revenue guidance for Q1 by 5-10% to $60 million-$70 million and expects a 20-25% hit in Q2, said Chief Financial Officer Christine Gorjanc. It expects to return to growth in the second half. Arlo added about 324,000 registered accounts to its platform in Q4, bringing the total to nearly 4 million, up 41% year on year; its paid account base grew more than 60% to 230,000, said McRae. Q4 revenue was little changed at $122.4 million.
Nortek warned customers in a Wednesday email of a “ripple effect” from coronavirus-related supply chain delays and disruptions. “This is a terrible and unexpected event that many companies, including ours, are addressing,” said Steve Deblock, executive vice president-operations, saying the company is “diligently” working with suppliers to prioritize production scheduling, return of personnel and ensuring customers “are supported to the best of our ability.” The company is managing affected product lines, offering substitutions where available and using “buffer/safety stock when we can.” It’s working with key suppliers and partners “as this will likely affect logistics, including container availability, driver availability, and port congestion.”