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Wednesday, January 20, 2021

Virus fears drag down tech

Concerns about the new virus are hitting the high-flying tech sector, as companies face manufacturing disruptions and cancel conferences. Microsoft said revenue from Windows licenses and its Surface devices “are more negatively impacted than previously anticipated.” The company said demand for Windows products is still strong, but it’s taking longer to get manufacturing back to normal. Earlier, Apple warned investors that it won’t meet targets for the current quarter because the outbreak has cut production of iPhones. All of its iPhone manufacturing facilities are outside Hubei province in China, the epicenter of the outbreak. But while previously closed facilities have reopened, the company said production is ramping up slowly. Research firm IDC lowered its forecast for

computing devices like PCs and tablets for 2020, saying they are likely to take a “substantial hit” due to the virus. It is not yet clear how the market will fare in 2021, IDC said. This depends on the trajectory of COVID-19 and how the supply chain responds and adapts. As for smartphones, already falling because innovations have slowed down, IDC forecasts a decrease of nearly 11% in the first six months of the year, as Chinese workers gradually return to factories. Meanwhile, Facebook canceled its May 5-6 developers’ conference in San Jose, California. The company said it is planning alternatives, such as live streams, locally hosted events and videos. More than 5,000 people from around the world attended last year’s conference, known as F8.

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