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With MWC 2020 canceled, most new Android phones face a tough debut

Smaller handset makers rely on events like Mobile World Congress to get attention for their devices. Some may still show up in Spain.

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MWC 2020 won't be taking place this year because of coronavirus. But workers had already started setting up the convention center.

Getty Images

With Mobile World Congress 2020 officially terminado -- thanks to the coronavirus -- mobile vendors, big and small, are now scrambling to figure out their next steps. Some, particularly Chinese companies, are mulling plans to proceed with their events in Barcelona, Spain, even though the official conference won't take place. 

MWC brings together companies from across the world, with many using the weeklong trade show as the place to introduce their newest smartphones. This year was expected to feature new 5G phones from nearly every major Android vendor, as well as updates about the networks running the new superfast connectivity. While 5G became a reality last year, this year is when it could go mainstream. 

MWC is key to the mobile industry for two big reasons: It's where vendors get attention for their newest devices and it's where companies hammer out deals behind the scenes. That includes getting carriers to agree to offer devices from smaller players that don't go by the name of Apple or Samsung. This year's show was officially slated to run from Feb. 24 to 27, with press meetings starting as early as Feb. 21.

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On Wednesday, though, GSMA finally pulled the plug on the entire show. The show's organizer said the coronavirus, the disease infecting tens of thousands of people, had made it "impossible" for the show to proceed.

With MWC no longer taking place, that disrupts the launches -- and dealmaking -- for over 2,000 companies that planned to attend the show. For some, it could mean holding their own events or simply putting out press releases to unveil their newest gadgets. Many could delay their product launches altogether while they figure out what to do. Ultimately, we may all have to wait longer to hear about -- and buy -- the latest gadgets.

"The delayed product releases that will occur as the result of this show, as well as the supply side challenges surrounding the coronavirus' broader impact in China ... could potentially delay the smartphone industry's return to growth into 2021 if the current state of flux is not settled soon," Futuresource Consulting analyst Stephen Mears said.

The mobile industry has been struggling in recent years. Consumers are holding onto their phones longer than ever before, and they're often opting for cheaper models over high-end, flashy devices. The industry had been counting on 5G to get consumers shopping for phones again, and MWC 2020 was supposed to start the buzz. 

There are some companies, particularly the Chinese mobile companies -- that are considering proceeding with their already planned Barcelona events, according to people familiar with the companies' discussions.

Hurting the smaller fries

While Samsung and Huawei, two of the world's biggest phone makers, won't be able to take advantage of MWC's marketing opportunities this year, the show's cancellation will have the biggest impact on smaller mobile companies.

It's easy for Samsung -- the world's biggest smartphone vendor -- to get thousands of journalists to cover its product launches, like Tuesday's Galaxy S20 Unpacked event. It also doesn't have to work hard to convince carriers to sell its newest phones. And in recent years, Samsung has pared back its presence at MWC. It favors holding its own event to introduce its devices. 

But for smaller players like Nokia-vendor HMD, launching a product at MWC gives them more visibility than they might have otherwise. 

"The impact on small companies who have invested a disproportionate amount of their budgets and time on this event should not be under-estimated," CCS Insight analyst Ben Wood said. "MWC is an anchor event for many, and now they face the challenge of having to figure out what [is] the best way to salvage something from this difficult situation."

Most companies have not yet said what they'll do in lieu of MWC. HMD, for one, delayed its product launches because of MWC's cancellation. The company said it'll provide updates about its plans at a later time.

Delaying deals

The disruption to behind-the-scenes dealmaking could have an even bigger impact on the mobile industry. 

The trade show might appear to center on phone launches, but it also plays host to important conversations between vendors and clients where deals are struck to keep the mobile industry ticking.

The world's first Android phone, the T-Mobile G1 from a decade ago, came about partly because of a dinner held at MWC. Android co-founder Andy Rubin met with then-HTC CEO Peter Chou for a dinner in Barcelona to talk about the future of smartphones. That get-together turned out to be critical to the future of the mobile industry. 

A few months after that dinner, Google acquired Android. While many handset makers, including Motorola, rallied behind the new mobile software, Rubin insisted that HTC would be the launch partner because of that early work. The result was the T-Mobile G1 and HTC's early lead in smartphones (a position it later lost to Samsung and others).

And at last year's conference, senior officials from the US State, Defense and Commerce departments, as well as the chairman of the Federal Communications Commission, attended the show to convince companies not to work with Huawei on 5G. The company, which is the world's No. 1 telecom supplier and No. 2 phone manufacturer, has been accused of helping the Chinese government spy through alleged backdoors in Huawei's products (something Huawei has denied).

It's likely some deals and conversations will still take place, albeit delayed, but others that come about spontaneously may never happen. 

Coronavirus' impact

Over the past week, company after company pulled out of MWC 2020, following the lead of South Korean vendor LG, and numerous others said they'd alter their plans over concerns about the deadly virus. That included taking measures like quarantining Chinese executives for the two weeks leading up to the MWC conference.

A pneumonia-like disease, the new coronavirus was discovered in the Chinese city of Wuhan in December. The strain has now infected more than 45,000 people and claimed more than 1,000 lives. It's spread beyond China's borders to places like the US, Japan and Australia. Authorities around the world have begun limiting travel and enforcing quarantines to guard against the spread. 

The outbreak of the disease has had ripple effects across the globe and illustrates 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. 

Along with delayed events, it's possible the coronavirus will affect production of devices. Up to 45 million pairs of AirPods could be caught in limbo while manufactures wait on components needed to assemble the wireless earbuds, according to a report from earlier this month

"The bigger impact on consumers will come from how manufacturing will get impacted rather than how the launches are impacted," Creative Strategies analyst Carolina Milanesi said. "That is the real question on product availability."

The show must go on?

Several companies, meanwhile, are considering proceeding with their launches in Barcelona, according to people familiar with their plans. That includes some based in China. GSMA had required Chinese attendees to quarantine executives outside China for two weeks ahead of the show. Huawei and Oppo, among others, have already stationed their China-based teams in Europe to make sure they were healthy ahead of MWC.

Other companies are exploring ways to have an MWC-like event without actually attending MWC. There's even a petition online (set up before the cancellation) trying to turn MWC into an online event.

"We believe there are alternatives that can be deployed to allow everyone to participate and still not spread the virus," the organizers wrote.

The cancellation of MWC has raised questions about the future of the show. GSMA has said it will be back in Barcelona in 2021, and it hosts a Shanghai version of MWC later in the summer. But there are concerns this could result in a much smaller event in the future. 

"The GSMA now needs to be careful that there is not a knock on effect from this year's cancellation," CCS' Wood said. "Major companies and many attendees will be reviewing the importance of MWC to their business."

Correction, Feb. 13: This story initially mischaracterized the timing of the T-Mobile G1's development. That phone came to market in 2008.