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Corona Virus and the impact on the IT Market

The Corona Virus, responsible for Covid-19 disease, has been in the headlines all over the world. Since its discovery, the virus has caused more than 2,500 deaths and more than 75,000 cases have been identified. With a very low mortality rate, the impacts of the disease extend to several other levels.

China represents the second largest economy in the world, responsible not only for the vast majority of exports worldwide, but also for a large part of imports from the North American market, particularly in the technology sector. In this sense, not only China is having difficulties in maintaining normal production and distribution of products, but also its inhabitants are reducing the number of products purchased abroad, which translates into a reduction in sales in the world’s largest economy, the United States of America.

As the Corona Virus is unpredictable and difficult to contain, it is still difficult for experts to determine what economic consequences it will have. However, the effects are already being felt by major technology companies.

Coronavirus locations
Confirmed locations with COVID-19 cases on 25/02

Tesla has stated that the virus constitutes a risk for its business, as has Apple, which has reduced its revenue target for the current semester. Amazon has not commented on the issue, but is stocking items from Chinese suppliers to avoid possible supply disruptions. The companies mentioned, with the exception of Tesla, are reducing or abolishing travel to China, encouraging their employees to work remotely.

Many companies in China are currently reopening their doors and trying to return to normality, although the response capacity is not yet sufficient to bring the market back into balance. Thus technology companies, whose product depends mostly on Chinese labour, are also postponing or cancelling some international events, namely launching new products with 5G technologies.

Sources:

https://www.itchannel.pt/news/hardware/coronavirus-ira-perturbar-mercado-chines-de-dispositivos

https://www.vox.com/recode/2020/2/20/21145803/coronavirus-impacting-big-tech-business-apple-amazon-facebook-big-tech-impacted

https://www.cdc.gov/coronavirus/2019-ncov/locations-confirmed-cases.html

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