The use of technological devices for working from home and leisure has increased by an average of almost 40% during the lockdown
05 de June de 2020
05 de June de 2020
Thursday 4th June 2020 - EAE Business School has published a report entitled “The Covid-19 crisis and its impact on the technological sector”, which reveals that the use of technological devices for working from home and leisure has risen by almost 40% during the lockdown. As the report indicates, these habits have been incorporated during this period and are here to stay, either permanently or for as long as the initial period of uncertainty and social distancing lasts.
“Everything seems to indicate that the pandemic has forced us to take the giant digital leap that many people predicted, but nobody found the time to implement. The new working habits and dynamics have made it very clear that there are segments of our own society, within the context of so-called ‘advanced societies’, that run the risk of being left behind in this giant leap, not only because of the knowledge gap but also in terms of access to certain technological devices”, explained the author of the report and lecturer at EAE Business School, Romà Andreu.
During the first weeks of the lockdown in March, there was a 64% rise in the use of smartphones among Spaniards, six percentage points less than the average around the world. In contrast, laptop use rose by 47%, seven percentage points above the global average, compared to a 28% rise in the use of PCs, 4 points below the international average. Consumption through smart TVs also rose by 35%, five points below the average around the world, while console use climbed by 12%, two points below average.
The increase in downloads de video conferencing apps has also grown at a global level. In the case of Spain, there was a remarkable increase in the use of Houseparty, an app very commonly used by Generation Z, the number of downloads of which multiplied by 2,360 in Spain during the lockdown, followed by Italy with a 423-fold rise and, far behind the two leaders, France with an increase of just 30 times. With respect to other apps, Spain ranked around the general average, with the exception of Google’s Hangouts Meet app, downloads of which exceeded the United States by 35 times.
As well as the increase in downloads of video conferencing apps, Spain also recorded a rise of around 20 million downloads of gaming apps within just a month, from 43 million downloads per month to 66 million. This 20 million jump was similar for all the countries in the sample: United Kingdom, France, Germany, Italy and Spain. However, Spain saw the biggest increase in percentage terms, with a jump of 53%.
Moreover, Spain has seen a 47% rise in the use of social media during the lockdown, ranking around the global average. This increase in the use of these platforms may have a significant impact of the advertising performance of services such as Facebook or the companies that advertise on these platforms. For instance, according to Facebook and as highlighted in EAE’s report, in April 2020, the average number of clicks per advertisement at a global level was 13 users per advertisement per month. The leading country in terms of advertising click is Romania, at 26. Spain ranked higher than average, at 18 clicks.
“The data shows the changing way consumers are using and accessing the Internet, with smartphones, streaming services and social media emerging as the clear winners in this crisis”, explained the author of the report, Romà Andreu, referring to the new consumption trends triggered by the lockdown.
However, Andreu warns that “the significant increase in data consumption is stretching telecommunication networks, which, in general around the world, are suffering from reduced transmission speeds both in terms of mobile and fixed-line internet connections. This tension will probably be transferred to the hosting and cloud-based services infrastructure segment if providers are unable to scale their capacity up to meet the demand”.
The data for February and March 2020 reflect this, with the mobile internet access speed growing by just 3.7%, with only 10 countries recording increased speed. In the case of Spain, the speed fell by 9.8%. With respect to fixed-line Internet access, the international average was around 1.0%. Thirteen countries recorded and increase in their speed. Spain also fell by 3.7% in this segment.
With respect to the huge boom in cloud-based services contracted in Spain to guarantee the possibility of working from home, this market is estimated to have seen an increase of 7% in hosting, storage and computing and 9% in security on the cloud.
THE IMPACT OF COVID 19 ON ORGANIZATIONS IN THE SECTOR
The technological sector has experienced a negative impact from the Covid-19 crisis, above all, in the equipment manufacturing segment, as it depends a great deal on components and suppliers that have temporarily suspended their activity, thereby breaking the supply chain.
The service segment, in contrast is experiencing a very significant increase in business, which, in many cases, has led to a significant rise in their value. One such case is the video conferencing platform Zoom, which doubled its share price in March, compared to the start of this year. Moreover, the expected turnover for Zoom for 2020 is over three times the previous year, at 330%.
However, organizations as important as Apple and Microsoft have already announcement that they will not meet the forecasts for the first quarter of 2020. The companies that have made predictions of the impact of the pandemic on their financial performance estimate that it will trigger losses of between 10 and 80 million dollars. Even Agilent Technologies Inc., a large part of whose activity focuses on the laboratory and analysis business of the biomedical sector, predicts losses of 50 million dollars in 2020. Logitech adjusted its profit forecasts to 365 million dollars, with 375 million in non-GAAP earnings, compared to its previous forecast of 375 million to 385 million dollars.
Despite the bad omens, organizations have had a fast and generous response in the fight against Covid-19, as detailed in the report. For instance, to date, Google has donated nearly one billion dollars. The company’s generosity is followed by Cisco, which has donated 224 million, Facebook, with 122 million, and Netflix with 100. Chinese companies have also made donations, led by the giant Tencent Holdings, which has donated 173 million dollars, followed by the Alibaba Group, with 144.2 million, which has contributed almost 5 times the amount donated by its Western counterpart Amazon, one of the greatest beneficiaries of this crisis.
IMPACT OF COVID-19 ON THE SUPPLY CHAIN
A large proportion of Covid-19’s impact in terms of lowering growth forecasts for the technological sector is due, at an initial level, to the breakdown of the supply chain. “The lockdown of the Chinese population, leading to the closure of the companies that manufacture essential components, such as microprocessors, and assembly plans, as well as causing a drop in logistics activities, has had a significant impact on the sector”, explains Andreu.
The report indicates that the three electronics segments that are set to be most affected by delays in the supply chain are consumer goods, affected by 40%, industrial, by 24%, and automotive, by 19%. The most strategic industries and lower volume sectors rank significantly lower, as they tend to use local suppliers.