Handset brands, ODMs, component makers facing challenges in supply chain, marketing management

Handset brands, ODMs and component makers are facing mounting challenges over their supply chains and marketing management arising from the coronavirus outbreak, according to industry sources.

The handset supply chain in China remains in critical conditions as factories workers have trouble returning to work and recruitments of new employees are difficult due to traffic controls and lockdowns of cities.

Xiaomi has been asking production partners to ramp up the output of its newly released Mi10 series devices but the results have been lower than expected, according to sources familiar with the supply chain makers.

Foxconn Electronics, the most important hardware production partner for Apple, reportedly has been giving out a working allowance of CNY3,000 (US$428) for any eligible returning workers in order to ensure the production lines at its Zhengzhou plant can operate smoothly, indicated the sources. The Zhengzhou plant reportedly is a major production base for iPhone devices.

Even with Foxconn’s efforts, Apple has warned that its fiscal second-quarter revenues may not meet its guidance released earlier as the coronavirus outbreak is expected to result in iPhone supply shortages and weak sales in China.

Pegatron, another production partner for Apple, reportedly is also giving bonuses to employees at its factories in China who have decided to stay and continue to work for the company, noted the sources.

However, Samsung Electronics is still faring well currently. The vendor’s sales of smartphones in Taiwan have not been much affected by the epidemic, according to Jacob Chen, vice president of mobile and information business unit at Samsung Taiwan.

Pre-sales of its newly released foldable model, the Galaxy Z Flip, available both at its online and physical stores, have sold out, Chen said.