At the end of the month, many of the world's top mobile companies were scheduled to make their annual pilgrimage to Barcelona for Mobile World Congress. But worries about the coronavirus outbreak proved too strong to ignore. On Wednesday, the show's organizer canceled MWC 2020, saying it was "impossible" to proceed.
The move has left companies scrambling to figure out their next steps. 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. Some, particularly Chinese companies, are mulling plans to proceed with their events in Barcelona, Spain, even though the official conference won't take place.
"The impact on small companies who have invested a disproportionate amount of their budgets and time on this event should not be underestimated," CCS Insight analyst Ben Wood said. "MWC is an anchor event for many, and now they face the challenge of having to figure out the best way to salvage something from this difficult situation."
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 super-fast connectivity. Though 5G became a reality last year, this year is when it could go mainstream.
But attendees and organizers were worried about an uninvited guest: the new coronavirus discovered in December in Wuhan, the capital of the Chinese region of Hubei. The virus triggers a pneumonia-like disease, now officially dubbed COVID-19, that as of Wednesday has hit more than 45,000 people and claimed more than 1,100 lives. The illness has spread beyond China's borders to around 30 countries, including the US, Japan and Australia, and two cases have been confirmed in Spain.
Prior to MWC's cancellation, the companies that had withdrawn from the show included Nokia, Vodafone, BT, Deutsche Telekom, HMD, AT&T, Sprint, Cisco, Facebook, Intel, Royole, Sony, Amazon, LG, Vivo, Ericsson and Nvidia. Meanwhile, ZTE and TCL had canceled their press conferences, and Huawei and Oppo had placed their executives in quarantine outside China to make sure they were healthy (they'd stay in quarantine for 14 days ahead of the show).
Mobile World Congress 2020 was scheduled to run from Feb. 24 through Feb. 27, and press events were slated to take place several days beforehand.
MWC's slow collapse
GSMA, the trade group that puts on Mobile World Congress, noted last week -- before the big names began dropping out of the show -- that there was "minimal impact on the event thus far" and that the event was 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 was moving ahead with MWC but was putting additional, stringent health measures in place to reassure attendees and exhibitors that their health and safety were of "paramount concern."
Those measures included banning any travelers from China's Hubei province, where the coronavirus outbreak began, and requiring attendees who had passed through China to show proof they'd been outside the country for 14 days.
Authorities around the world have begun limiting travel and enforcing quarantines to guard against the coronavirus spread. As a result, many major players in the mobile industry reconsidered their MWC attendance, with options including dropping out completely or scaling down their presence. For some companies, it could've meant canceling travel by execs from places like Asia or the US and instead relying on European employees to staff their booths and events. Many were also planning to allow executives to decide if they wanted to travel to MWC at all.
MWC 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. If key senior people canceled, those conversations couldn't take place, discouraging other people and companies from attending, according to IDC analyst Francisco Jeronimo.
"I think the number of people attending will drop dramatically this year," he said before GSMA canceled the event entirely.
When it came to holding MWC, the worry for many companies was 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 were 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 had taken steps to mitigate the spread of the virus, as it has detailed in press releases over the past week:
- It planned to increase on-site medical support and disinfection programs.
- It was going to install new signs on-site reminding attendees of proper hygiene.
- It would change mics between each speaker.
- It would advise all attendees to adopt a "no-handshake policy."
- GSMA also had set up a free, 24-hour telephone security and medical service for all attendees.
- It had 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 last week. "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 (World Health Organization) 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 had detailed four enhanced measures:
- All travelers from China's Hubei province, the epicenter of the outbreak, would be banned from the event.
- All travelers who'd been to China would need to provide evidence that they'd been outside China for 14 days prior to the event (from Feb. 10 onward).
- Temperature screenings would be implemented.
- Attendees would need to self-certify that they hadn't been in contact with infected individuals.
The WHO hadn't issued specific guidance regarding the show or other large international gatherings, and it had directed a request for comment to its general technical guidelines for dealing with the outbreak.
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."
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 that 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 last 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, warned on Feb. 5 that the coronavirus could hurt global handset demand.
Sitting this one out
MWC's planned precautions weren't enough for some companies. On Feb. 5, South Korea-based LG became the first major tech company to announce that it wouldn't attend MWC in order 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."
On Feb. 7, Swedish telecom giant Ericsson became the second company to pull out of the show, also citing coronavirus concerns. The company said the demos and content created for the show will 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."
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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."
It seemed almost inevitable that more companies would follow the lead of Ericsson and LG in deciding to sit out the show this year, IDC's Jeronimo said in early February. "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 in the day on Feb. 7, 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.
After that, the departures came at a steady clip. On Sunday, Amazon confirmed it would withdraw from MWC 2020 "due to the outbreak and continued concerns about novel coronavirus."
Sony followed suit early Monday and pulled out, but the company said its press conference, where it was expected to show off its latest Xperia flagship, would go ahead as scheduled. It will now be livestreamed via the internet.
On Tuesday, AT&T, Sprint, Cisco, Royole, Facebook, Intel and Vivo joined the list of big names withdrawing from the show, as did KMW, a company that specializes in engineering and manufacturing radio frequency components for companies such as Nokia and Samsung.
"The safety and wellbeing of all our employees and partners is our top priority, and we have withdrawn from this year's Mobile World Congress out of an abundance of caution," an Intel spokesman said in a statement.
"Out of an abundance of caution, Facebook employees won't be attending this year's Mobile World Congress due to the evolving public health risks related to coronavirus," a company spokesman said in a statement.
Cisco tweeted its withdrawal on Tuesday. "We have made the difficult decision to withdraw from participating in Mobile World Congress ... due to concerns about the current outbreak of coronavirus."
"We value our participation in important industry groups like GSMA and deeply respect the steps they have already taken to protect attendees," an AT&T representative told CNET in a statement. "Unfortunately, the most responsible decision is to withdraw our participation from the event to safeguard our employees and customers."
AT&T Business CEO Anne Chow was previously scheduled to give a keynote address at the event.
On Wednesday, Nokia, Vodafone, HMD, BT and Deutsche Telekom said they too wouldn't attend the show. HMD, which makes Nokia phones, said it would postpone the launch of its new devices and expected to announce them at a later date.
"Rather than meeting customers and stakeholders in Barcelona, Nokia plans to go directly to customers with a series of "Nokia Live" events aimed at showcasing the industry-leading demos and launches scheduled for MWC," Nokia said in a statement.
Quarantine and hygiene
Companies traveling from China for MWC faced a unique challenge as they carefully navigated balancing their participation at the show with the health risks of asking their employees to travel to Europe from Asia. No major Chinese companies had pulled out of the show before GSMA pulled the plug.
ZTE canceled its press conference, originally scheduled for Feb. 25. All other scheduled activities were slated to go ahead as planned, it said in a statement.
On Monday, TCL -- the Shenzhen, China-based maker of Alcatel, BlackBerry and TCL-branded phones -- said that it, too, would cancel its press conference, earlier slated for Feb. 22. The company cited an "abundance of caution and care for our staff, customers, press and other guests."
Other Chinese companies were taking other significant precautions, like quarantining executives. Between 5,000 and 6,000 delegates from China usually attend the show, and many were asking their colleagues in Europe to attend this year on their behalf, said the GSMA.
Honor, the handset brand owned by Huawei, said it was on track to attend MWC. Huawei and Honor both have a significant presence in the UK and Western Europe, and Honor planned to staff its booth with workers from those areas, as opposed to China-based employees. But the company's president, George Zhao, was no longer scheduled to attend the show.
Of the companies still planning to bring employees from China, Huawei, Oppo and ZTE asked their employees to spend two weeks in quarantine ahead of the show. All of Huawei's China-based delegates and ZTE senior executives were going to spend this period of isolation in Europe, the companies had said.
Those executives are currently spending their time in quarantine outside of China. Because many already were in Europe, the Chinese vendors considered proceeding with their Barcelona press events as earlier planned.
Oppo had said that in addition to quarantining staff, it would monitor employees with daily health checks and conduct temperature checks for all participating in Oppo events.
What will coronavirus mean for mobile in 2020?
Product launches and announcements previously expected at 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 year after year 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.
CNET's Sareena Dayaram, Jason Hiner, Lynn La and Jackson Ryan, Eli Blumenthal and CNET Espanol's César Salza contributed to this report.
Originally published Feb. 8.
Updates, Feb. 9: Adds Amazon's withdrawal and MWC's new restrictions on attendance; Feb. 10: Adds Sony's withdrawal and TCL's press conference cancellation; Feb. 11: Adds AT&T's, Facebook's, Intel's and Vivo's withdrawal from the show; Feb. 12: Adds Nokia's, HMD's, BT's, Deutsche Telekom's and Vodafone's withdrawal. Later adds information about MWC cancellation and updates article to reflect the change.