Financial Crisis and SARS Survived by MWC... Surrenders to COVID-19 (Comprehensive)

On the 12th (local time), officials are collecting welcome placards at an exhibition hall in Barcelona, Spain, where the Mobile World Congress (MWC) 2020 was scheduled to be held. The GSMA, the Global System for Mobile Communications Association that organizes MWC, announced in a statement on the same day that MWC 2020, scheduled for the 24th to 27th, has been canceled due to the impact of COVID-19. [Image source=EPA Yonhap News]

[Asia Economy Reporter Seulgina Cho] The global fear surrounding COVID-19 ultimately led to the unprecedented decision to cancel the first-ever 'Mobile World Congress (MWC) 2020' in 33 years. The mobile telecommunications industry's festival, which had withstood the global financial crisis, the European debt crisis, and even the 2003 Severe Acute Respiratory Syndrome (SARS) outbreak that occurred just weeks before the event, could not overcome the barrier posed by the China-originated COVID-19.

The GSMA, the Global System for Mobile Communications Association that organizes MWC, officially announced on the 12th (local time), two weeks before the opening, that MWC2020 scheduled to be held from the 24th to the 27th in Barcelona, Spain, would be canceled. Chairman John Hoffman explained the reason for the decision, stating, "Due to the COVID-19 outbreak and the resulting global concerns and travel warnings, holding the event has become impossible." This is the first time in the 33-year history of MWC, the world's largest telecommunications and mobile exhibition, that the event has been canceled. In the case of SARS in 2003, although the outbreak occurred in early February just before the opening of MWC, it did not significantly affect the event overall. Even during the European debt crisis and the global financial crisis, MWC was held on a grand scale with about 2,000 companies participating.

This unprecedented decision followed a series of major technology companies, starting with LG Electronics earlier this month, including Ericsson, Nokia, Nvidia, Amazon, Facebook, Intel, and Sony, announcing their withdrawal from participation. These companies judged that the spread of the virus would be inevitable at MWC, which attracts more than 100,000 visitors. The fact that many Chinese companies such as Huawei were also attending seems to have influenced the decision. According to GSMA, it is estimated that 5,000 to 6,000 Chinese attendees visit Barcelona annually to participate in MWC.

As the cancellation decision was formalized, voices expressing both relief and regret poured out from the related industries. Some companies that had not previously announced their withdrawal due to concerns about being viewed unfavorably by the organizers despite COVID-19 concerns now collectively expressed relief. However, there are also concerns because opportunities to review the latest IT technology trends at a glance and to hold consecutive business meetings with telecommunications and equipment industry officials from around the world are rare. Domestic companies, including SK Telecom, have also canceled or postponed dozens of business meetings originally scheduled.

Ben Wood, Research Director at CCS Insight, stated in a press release that day, "MWC is the highlight of the telecommunications industry," and emphasized, "The impact on companies that have invested budgets and time should not be underestimated." Approximately 2,400 companies participate in MWC annually.

Saskia Sagan, a mobile analyst at PCMag.com, also pointed out, "The cancellation of MWC is a huge loss not only for the industry and innovation but also for 5G." He added, "MWC shows where the entire industry is heading and allows industry stakeholders to meet Ericsson, Intel, Nokia, and Qualcomm in one day to plan their business," emphasizing again, "The true function of MWC is that it serves as a single marketplace where small companies can meet all telecommunications carriers and infrastructure providers worldwide."

The costs already spent on booth preparations and other arrangements are inevitably lost. Initially, GSMA requested the Spanish authorities to declare a health emergency or other emergency status, but it was reportedly not accepted. In such a case, losses due to event cancellation cannot be covered by insurance. An industry insider said, "Hundreds of millions of won have already been spent," adding, "Small and medium-sized enterprises likely used a significant portion of their annual marketing budgets." The economic impact of MWC is estimated to create 14,100 jobs and generate 492 million euros within Barcelona alone.

The China-originated COVID-19, which has alarmed the world, is also delivering a direct blow to the global smartphone market in the first quarter, centered on Apple and Huawei. According to a report by the analysis firm TrendForce, global smartphone shipments in the first quarter (January to March) are estimated to decrease by 12% year-on-year to 275 million units. By company, Apple and Huawei, which have a high production ratio in China, are expected to decline by 10% and 15%, respectively.

Market research firm Counterpoint also estimated that it would take more than two months for production facilities in China to normalize due to COVID-19, forecasting that smartphone shipments in China in the first quarter would decrease by about 30%. Especially, if limited to offline sales, the decline is estimated to reach 70%. CNN pointed out, "The IT technology industry is particularly centered on production facilities in China, making it prone to disruptions," and noted, "The uncertainty of COVID-19 is significant."

The cancellation of MWC is expected to lead to a series of cancellations of exhibitions and fairs scheduled worldwide. The organizers of Baselworld, a watch exhibition held in Switzerland in April, are currently reviewing whether to cancel the event. At the Milan Collection, which will be held in Italy from the 18th, over 1,000 Chinese buyers have been banned from entry. Foreign media added that online broadcasting will be conducted as a last resort.

This content was produced with the assistance of AI translation services.