GlobalData revised outlook says technology, media and telecom sectors will be negatively effected by Covid-19 although cloud services and colaboration software may fare better than consumer electronics
Cloud services and virtual collaboration software vendors along with IT infrastructure businesses may get a bounce from the effects of Covid-19, while IT services and consumer electronics brands may be hardest hit, according to the revised GlobalData Tech, Media & Telecom Trends 2020 report.
The research consultancy has revised the outlook for 600 companies in 17 separate technology, media and telecom sectors and is already finding consumer electronics the big loser, with Apple falling from fourth position to 14th because of its exposure to the Covid-19 theme.
Given the global scale of the virus and the drastic measures needed to contain it, GlobalData is predicting overall all tech, media and telecom sectors will feel the effects of the global pandemic currently gripping the world.
The 17 sectors covered by the report are IT services, consumer electronics, advertising, component makers, telecoms infrastructure, semiconductors, IT infrastructure, industrial automation, telecom operators, application software, music, film and TV, ecommerce, social media, publishing, gaming and security software.
GlobalData stated the pandemic is effectively a stress test on companies’ ability to cope with extreme shocks. According to the report, the situation will test the financial robustness of companies, and many will not survive this initial phase. And almost all others will suffer significant drop in revenues.
On the consumer front, GlobalData head of thematic research, Cyrus Mewawalla, explained its downgraded predictions for Apple relate to supply chain issues along with a predicted downturn in consumer electronics spending for the rest of 2020. When it comes to the business sector, GlobalData predicted IT services will be the worst hit with both constraints in the immediate phase of shutdown and longer term.
GlobalData chief analyst for thematic research, Stuart Ravens, said the short-term pain IT services will experience trying to deliver existing projects will be acute.
“While clients are locked down for three months will be replaced by the long-term pain of a massive slowdown in IT projects as companies scale back spending to project 2020 profits,” he said.
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