COVID-19 has changed the way the world works. People, schools, and businesses have been pushed to adapt to a completely new lifestyle within weeks of the pandemic. Employees and staff are forced to work in isolation and continue work from home. The economic collapse caused by the pandemic put a halt on all business and consumer activities, and things haven’t been looking good since for several industries. However, the IT industry quickly adapted to the ‘new normal’ and the digital shift of businesses.
The Impact Of COVID-19 Lockdown on Tech Industries
While silicon giants such as Google, Facebook, Microsoft, Apple, and Samsung, and others have their employees continue work from home, many tech companies are dealing with serious budget cuts and losses. Although most companies built a survival pack to fall back on, they were not prepared to deal with an unexpected variable like COVID-19.
Every contingency plan made is a response to foreseen circumstances, for instance, catastrophic events like security issues, natural disasters, and compromised business relationships outline the plan. However, most companies, specifically tech companies, built to keep up with changing trends and technology, don’t have a 5-year plan. When coming up with a contingency plan, IT service companies generally don’t consider the possibility of a global pandemic causing country-wide lockdowns, extended quarantines, and travel bans.
No organization ever takes into account the minor possibility of the world stopping. Therefore, they struggle to survive and thrive to maintain their customer base in a collapsing economy.
Impact on Smartphone Production
There’s no doubt the top firms is facing a huge struggle in terms of opportunities. The virus severely impacted the fastest moving productions, smartphone production, putting a halt on all current smartphone launches, so how are they handling their operations now? Because a strict lockdown is imposed, retail stores are closed, venues are shut, and eCommerce platforms are restricted from selling anything other than essential items. Therefore all operations are paused for now until the industry comes out of the state of a complete standstill.
Apple, the tech giant, faced a 10% reduction in market share due to unavailability of iPhones in the market due to the lockdown in China as it’s primarily responsible for the production of iPhones. Like Apple, many other smartphone vendor leaders such as OPPO, Xiaomi and Huawei rely on China for production facilities. The impact of COVID-19 on the product and supply sector has been huge. Supply and manufacturing issues from China, crippled demands, and global distribution blur out the future of the tech industry in 2020.
Bouncing back and covering for lost time, lost opportunities, and lost demand will inevitably take a lot of time.
How Is Digital Shift Treating Companies Financially?
The rising number of cases have pushed some major tech conferences and partnership opportunities to get cancelled. The biggest developer’s conference, Google’s I/O, and the event of the year, MWC Barcelona 2020, were canceled due to the spread of the virus. Many huge firms like Nokia, Samsung, LG, Sony, and more were too concerned about their employees’ health to let them attend the event for media and PR. Not only conferences but huge tech events and launches were pushed back until further notice because of the spread of the deadly virus.
Marketing and production opportunities have been greatly compromised in the tech industry due to imposed lockdowns. Many companies, like EA and Xiaomi, took their event online to avoid facing financial loss and lose networking opportunities. However, it couldn’t make up for the loss of effort, time, and money. Although it is the new normal and is progressively being normalized, currently, every huge name is taking a hit in terms of revenue.
Most exporters in the tech industry strongly believe the economic hardship will not allow the industry to stabilize and bounce back when all this is over, and the situation is better. After the 2008 economic meltdown and financial crisis, banks and governments helped companies to stabilize the industry, but in current times, it’s impossible to expect banks and governments to help the IT sector during a global health emergency.
With schools, businesses, and people shifting towards a digital landscape, convenience, flexibility, and adaptability have become a priority in current times. Different sectors of the IT industry are impacted in different ways. Let’s take a look at them to understand the intensity of the impact.
The App Development Sector
The app development sector benefited the most in the whole industry. The total number of app downloads saw a 2% spike, whereas business and consumer spending patterns changed. Travel and hospitality apps faced a huge decline as Uber and Lyft shut down operations during the lockdown and laid off a total of 4000 employees! Airbnb and Yelp had to cut down on the workforce a few weeks into the pandemic. A workforce of almost 2000 people was dismissed due to the lockdown and zero business.
The Hardware/Software Infrastructure
Supply chain constraints have postponed the launch of smartphones globally. Due to lower consumer spending, companies are struggling with unpredictability and a shortage of parts. It’s one of the reasons why the industry is suffering from software and hardware at the moment, and due to increased remote-working capabilities, firms and organizations are placing bulk orders for mobile internet, laptops, and other remote devices to support work from home.
Networking and IT services
With the world going digital, the demand and need for effective communication services, teleconferencing software, and cloud infrastructure services have increased significantly. As many tech companies didn’t counter in the possibility of a pandemic in their business continuity plans, they will surely need a great deal of help to fulfill these demands.
Remote working calls for flexible, resilient and secure communication and networking platforms; While IT departments are working hard to maintain the integrity of recovery and communication systems, it will take a whole lot of time to improve and adapt to the shift because of the economic downfall.
What to Do Next?
Technological leaders have to reevaluate their strategies to recognize growth and innovation opportunities in such difficult times. They have to recover first to respond and thrive in the industry. If you’re an IT company looking to reach out to a wider audience, go ahead and get listed on topfirms.