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Follow UsIt's not only the global recession and
slowdowns that impact the global IT industry. Very often, it's
issues like swine flu, bird flu and the likes or even travel advisories
issued by different governments that put a spoke on the wheels of the
IT sector. The latest brake to the momentum of the IT industry has been
applied by Eyjafjallajoekull (it's a real tongue twister pronounced as
ay-yah-fyah-plah-yer- kuh-duhl), the Icelandic volcano whose ash
eruptions have caused havoc with airline schedules around the world.
Most mobile phones are shipped on airplanes, which has made deliveries
vulnerable to the ash cloud that has spread from Eyjafjallajökull.
The impact on mobile phone distribution has varied among vendors. Phone
manufacturers have rerouted their shipments to countries where the
airports have remained open, and then sent the phones via trucks to
their destinations. This switching to trucks has resulted in a
three-day delay, but in most cases this has been handled with current
inventories maintained by the vendors.
There was a small build-up of inventory during the end of the first
quarter in Europe, and that has helped phone manufacturers during the
transportation mayhem caused by the volcano. However, most phones come
to Europe from Asia; therefore it becomes all the more crucial to check
the impact on this trail. Taiwanese smartphone maker HTC, which ships
its devices by air, in fact, claims that the air transportation trouble
in Europe has not affected its shipments so far.
That was primarily because HTC does not ship by air daily. Europe is
one of HTC's most important markets, accounting for nearly a third of
its revenue last year. The company had also slated shipments of its
latest
including the Android-based Desire and Legend, as well as the Windows
Mobile-based HD Mini, to Europe in March and April. Not all Taiwanese
vendors have been so lucky with Eyjafjallajoekull though. The
world's largest contract electronics maker, Hon Hai Precision Industry,
has been affected to some extent by the air cargo situation in Europe.
Japanss Fujitsu's notebook PC shipments to Europe have been
halted temporarily due to the disruptions. The company though claimed
there was enough inventory in the region to ensure there would be no
impact on earnings at the moment. Sony, Sharp, Hitachi and Panasonic
however claimed that they were experiencing no impact. In Seoul, a
Samsung official claimed that if the stoppage of flight services in
Europe lasts more than a couple of weeks from now, it will be negative
to technology exporters.
A survey by the NBTA Foundation the research arm of the National
Business Travel Association (NBTA) of corporate travel managers at
major corporations across the globe found that the volcanic ash over
Iceland and much of Europe negatively impacted travel for 80% of
companies, at an average cost of nearly $200,000 per affected company,
and highlighting the importance of effectively managing corporate
travel.
The 234 survey respondents indicated that on average, more than 160
travelers from each company were stranded away from their homes,
costing the company more than $197,000 in unexpected travel expenses.
Across the roughly 2,000 companies represented in the survey, the data
indicates more than 310,000 travelers experienced travel disruptions,
costing the surveyed companies more than $367 million collectively.
While the closure hasn't yet impacted shipments at major chip makers
including
Elpida Memory and Hynix Semiconductor, analysts say if the disruption
is prolonged, it could potentially hurt their earnings because it may
lead to higher inventory levels in Asia, hitting prices. Samsung may
see a bigger impact on its business than its peers because its exposure
to the European market is large. Samsung's sales from Europe accounted
for around 28% of its total sales in the most recent financial year.
Hynix Semiconductor , the world's second-largest computer memory chip
maker by revenue after Samsung, says its
to European countries accounts for about 7% of its total sales. LG
Display, the world's second-largest LCD maker by revenue after Samsung,
ships some of its smaller panels by air though most of its shipments
are by sea. The company claims that if the situation does not improve
it can meet the flat-panel demand for about a week more from its
existing inventories.
Eyjafjallajkull: Volcanic Ash that Might Turn Technology Exports to Ashes
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