Coronavirus fears push MWC to add new restrictions
MWC organizers ban travelers from Hubei, the epicenter of the coronavirus outbreak, as exhibitors continue to pull out over health concerns.
Shara Tibken,Katie Collins
February 9, 2020 5:13 PM PST
Mobile World Congress, held each year in Barcelona, brings together the world's biggest wireless companies. [Getty Images]
In two weeks, most of the world's top mobile companies will descend on Barcelona for Mobile World Congress. But worries about an unwelcome potential attendee -- coronavirus -- threaten to scuttle the entire show.
Amazon, LG, Ericsson and Nvidia have withdrawn from the show, and ZTE has canceled its press conference. Huawei and Oppo plan to quarantine their executives for 14 days before MWC starts, and Oppo will check the temperature of every person attending its events. Samsung, the world's biggest smartphone maker, plans to pare back its presence, people familiar with the matter said, and will send fewer executives from places like the US and Korea.
GSMA, the trade group that puts on MWC, noted Thursday -- before Ericsson, Nvidia and Amazon dropped out of the show -- that there's "minimal impact on the event thus far" and that the event is proceeding as planned. "Spain, the City of Barcelona and the GSMA look forward to welcoming attendees to MWC Barcelona 2020," the group said.
On Sunday, GSMA reiterated that it's moving ahead with MWC but is putting additional, stringent public health measures in place to reassure attendees and exhibitors that their health and safety are of "paramount concern."
Those measures included banning any travelers from China's Hubei province, where the coronavirus outbreak began, and requiring attendees who have passed through China to show proof they have been outside of the country for 14 days.
A pneumonia-like disease, the new coronavirus was discovered in the Chinese city of Wuhan, capital of Hubei, in December. As of Sunday, the strain, dubbed 2019-nCoV, has infected more than 40,000 people and claimed more than 900 lives. It's spread beyond China's borders to around 30 countries, including the US, Japan and Australia. Two cases have been confirmed in Spain. Authorities around the world have begun limiting travel and enforcing quarantines to guard against the spread.
As a result, many major players in the mobile industry are reconsidering their attendance, according to people familiar with the internal discussions that companies are having. Some may pull out completely, the sources said, while others are planning to scale down their presence. For some companies, that could mean canceling travel by execs from places like Asia or the US and instead relying on European employees to staff their booths and events. Many are also planning to allow executives to decide if they want to travel to MWC or not.
MWC brings together companies from across the globe, with many using the trade show as the place to introduce their newest smartphones. This year is expected to feature new 5G phones from nearly every major Android vendor, as well as news about the networks using the new super-fast connectivity.
The trade show might appear to center around phone launches, but it also plays host to important conversations between vendors and clients where deals are struck to keep the mobile industry ticking. If key senior people cancel, those conversations can't take place, discouraging other people and companies from attending the show, according to IDC analyst Francisco Jeronimo.
"I think the number of people attending will drop dramatically this year," he said.
China's wide reach
The spread of the coronavirus has had ripple effects across the globe, underscoring how connected the tech world has become. Chinese companies are some of the world's biggest makers of mobile devices, and they're also key parts of the supply chain, manufacturing components and assembling devices for customers across the globe. The worries about the coronavirus have resulted in shuttered factories and the quarantine of the 11 million people living in Wuhan. Numerous technology companies have closed their stores and offices in the country and have implemented travel restrictions.
"For tech, a big issue [is] the supply chain," Creative Strategies analyst Ben Bajarin noted. "We could see an impact, not just on smartphones but PCs and other consumer electronics if the workforce takes a hit or factories have to be shut down during specific quarantines."
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Apple CEO Tim Cook last month told investors that the company has suppliers in the Wuhan area and that it was "working on mitigation plans to make up any expected production loss." But he also warned that it was unclear how coronavirus would impact suppliers in other parts of China and noted the anticipated two-week shutdown in Chinese operations could mean delays for some devices. Foxconn, the main assembler of iPhones, said it'll be able to meet production needs, but a report this week said up to 45 million pairs of AirPods could be caught in limbo while manufacturers wait on components needed to assemble the wireless earbuds. (Apple is the one notable mobile company that doesn't attend MWC.)
Facebook's already-hard-to-get Oculus Quest headset could face more delays due to the coronavirus. And Nintendo said the coronavirus outbreak has delayed production of the Animal Crossing version of its Switch hybrid game console. Japanese preorders have been pushed back from Feb. 8 to an undetermined date.
Lenovo, the Chinese laptop maker, said it was avoiding large face-to-face meetings and allowing more people to work from home until more is known about the outbreak. HP has implemented some travel restrictions for employees going to and from China. Mozilla, which makes the Firefox browser, has made masks and hand sanitizer available. Five factories that make LCD and OLED panels are expected to see slowdowns in production, according to IHS Markit, a research firm.
And Qualcomm, the world's biggest maker of wireless chips, on Wednesday warned that the coronavirus could hurt global handset demand.
When it comes to MWC, the worry for many companies is the nature of the show itself. The bulk of the week's activities take place in a convention center on the outskirts of Barcelona, with about 100,000 people brushing up against one another, shaking hands and breathing the same air. Thousands of attendees are expected to travel to MWC from China, even though there are many flight bans. (US, European and Asian airlines have halted service to China for the time being.) People are typically crammed into tight quarters at press conferences, meeting rooms and show floor booths.
The coronavirus has been spreading from person to person, though it isn't clear how easily or quickly it moves.
The GSMA already has taken steps to mitigate the spread of the virus, as it has detailed in press releases over the past week:
It plans to increase onsite medical support and disinfection programs.
It will install new signs onsite reminding attendees of proper hygiene.
It will change mics between each speaker.
It will advise all attendees to adopt a "no-handshake policy."
GSMA also has set up a free, 24-hour telephone security and medical service for all attendees.
It has provided hygiene recommendations to Barcelona hotels, public and private transportation, restaurants and catering businesses, among other entities.
"The GSMA is building on its existing plans to protect the health of our attendees, clients and staff at MWC Barcelona," the group said Thursday. "Colleagues around the world are taking active measures to contain and lessen any further spread of the virus. These measures include adhering to advice from the WHO and other health authorities, respecting travel restrictions where they exist, arriving early in Spain to allow time for self-quarantine and ensuring access to masks."
On Sunday, the GSMA, Spanish health authorities and other agencies detailed four enhanced measures:
All travelers from Hubei province, the epicenter of the outbreak, will be banned from the event.
All travelers who have been to China will need to provide evidence they have been outside of China for 14 days prior to the event (from Feb. 10 onward).
Temperature screening will be implemented.
Attendees will need to self-certify they haven't been in contact with infected individuals.
The WHO hasn't issued specific guidance regarding the show or other large international gatherings, and it directed a request for comment to its general technical guidelines for dealing with the outbreak.
Sitting this one out
Those precautions weren't enough for some companies, including LG. The South Korean company on Wednesday said it wouldn't attend MWC, to protect its employees, partners and customers from the coronavirus.
"This decision removes the risk of exposing hundreds of LG employees to international travel which has already become more restrictive as the virus continues to spread across borders," the company said in a statement.
LG usually uses MWC as the venue to launch its flagship phone line, known as the G-Series, along with a few midrange devices. Market watchers expected the South Korean company to introduce a successor to the LG G8 ThinQ, presumably called the LG G9 ThinQ, in Barcelona. Instead, LG said it "will be holding separate events in the near future to announce its 2020 mobile products."
Swedish telecom giant Ericsson became the second company to pull out of the show on Friday, also citing coronavirus concerns. The company said the demos and content created for the show would instead be shown at local "Ericsson Unboxed" events at a later date.
"The health and safety of our employees, customers and other stakeholders are our highest priority," Börje Ekholm, president and CEO of Ericsson, said in a statement. "We were looking forward to showcasing our latest innovations at MWC in Barcelona. It is very unfortunate, but we strongly believe the most responsible business decision is to withdraw our participation from this year's event."
Ericsson is one of the world leaders in network technology and is consistently one of MWC's largest exhibitors. With the global rollout of 5G in full swing, this would've been a key year for the company at the show. In an updated statement issued following Ericsson's announcement, the GSMA expressed its "regret" that the company wouldn't be in attendance at MWC 2020.
"We respect their decision and are reassured by their commitment that they will be at MWC Barcelona 2021 in full force and our rebook trends for next year's event remain high," it said. "Ericsson's cancellation will have some impact on our presence at this time and will potentially have further impact."
Over the course of the next couple of weeks, it's highly possible that more companies will follow the lead of Ericsson and LG in deciding to sit out the show this year, IDC's Jeronimo said. "They will start getting concerned whether it's worth taking the risk," he said. People would understand if Chinese companies opted out of the show, he added, but a big European company such as Ericsson dropping out will likely have a knock-on effect on other players.
Late Friday, Nvidia became the third big company to withdraw from MWC. "Given public health risks around the coronavirus, ensuring the safety of our colleagues, partners and customers is our highest concern," the company said in a blog post. Nvidia hasn't had much -- or any -- presence at MWC in recent years, but it planned to talk this year about its efforts in artificial intelligence.
On Sunday, Amazon confirmed that it will withdraw from MWC 2020 "due to the outbreak and continued concerns about novel coronavirus."
Quarantine and hygiene
Companies traveling from China for MWC face a unique challenge as they carefully navigate balancing their participation at the show with the health risks of asking their employees to travel to Europe from Asia. At this stage, no Chinese companies have publicly said they've pulled out of the show.
Only one company so far, phone maker ZTE, is making any changes to its publicly planned activities. The company canceled its press conference, originally scheduled for Feb. 25. All other scheduled activities will go ahead as planned, it said in a statement.
But that doesn't mean Chinese companies aren't still taking significant precautions. Between 5,000 and 6,000 delegates from China usually attend the show, and many are asking their colleagues in Europe to attend this year on their behalf, said the GSMA.
Honor, the handset brand owned by Huawei, said it's on track to attend MWC. Huawei and Honor both have a significant presence in the UK and Western Europe, and Honor plans to staff its booth with workers from those areas, as opposed to China-based employees. The company's president, George Zhao, is no longer scheduled to attend the show.
Of the companies still bringing employees from China, Huawei, Oppo and ZTE are all asking their employees to spend two weeks in quarantine ahead of the show. All of Huawei's China-based delegates and ZTE senior executives will spend this period of isolation in Europe, the companies said.
Ericsson withdraws from MWC 2020 over coronavirus fears
Nvidia drops out of MWC 2020 over coronavirus worries
Citing coronavirus concerns, LG pulls out of MWC 2020
Oppo said that in addition to quarantining staff, it will monitor employees with daily health checks and conduct temperature checks for all participating in Oppo events.
"We are closely monitoring global developments regarding the coronavirus, and we are fully committed to protecting the health and safety of our employees," a spokesperson for the company said. "As of now, our plans for MWC, including executive meetings and exhibition activities, will go ahead with no changes."
Nokia-branded phone maker HMD, Microsoft, networking giant Nokia and TCL -- which sells devices under the Alcatel, Blackberry and TCL brands -- are among the companies that still plan to attend the show as normal.
"We continue to monitor closely and will decide our MWC plans as the situation develops," Nokia, one of the world's biggest makers of networking gear, said in a statement. (It's separate from HMD, which builds Nokia phones and will also attend MWC.) "As of now we continue to plan to attend, but the situation is fluid. We will make decisions based on the best interests and the health and safety of our employees and customers."
As of Friday, Samsung still planned to attend MWC, but it's reducing the number of employees it's sending and is reconsidering its overall presence at the show, people familiar with the matter said. The company didn't have a comment about its MWC plans.
What will coronavirus mean for mobile in 2020?
Among those attending MWC, coronavirus is likely to be the big topic that everyone is talking about this year -- maybe even ahead of the hot trends of 5G and foldable phones.
At this time, most launches and activities are scheduled to go ahead as originally planned. Product launches and announcements expected from companies pulling out of the show, including the unveiling of the LG G9 ThinQ, may suffer delays but won't be canceled altogether.
For the companies, the biggest impact could be a drop off in the dealmaking that goes on behind the scenes. Though they hold flashy press conferences and set up flashy booths, executives are largely in Barcelona to meet with each other. Carriers check out new phones, handset makers learn about upcoming components and partnerships are struck.
With the supply chains under pressure and fewer opportunities to make those deals that keep the industry ticking, the impact of the outbreak could be far-reaching but probably won't be felt until later this year when the next batch of phones, including the first 5G iPhones, are scheduled to make an appearance.
In the meantime, the GSMA is likely crossing its fingers that no other big dropouts occur ahead of this show. According to IDC's Jeronimo, if a major company such as Huawei or Samsung pulled the plug on its attendance, then MWC 2020 would be in big trouble.
"I don't expect the overall situation to get better in the coming two weeks," he said. "Especially because the Chinese government cannot keep people at home forever, so at some point they will have to start going to work and the situation will get worse."
CNET's Sareena Dayaram, Jason Hiner, Lynn La and Jackson Ryan and CNET Espanol's César Salza contributed to this report.