Mobile World Congress Cancelled: What Does this Mean for the Smartphone Industry?

Following the news that GSMA has decided to cancel Mobile World Congress in Barcelona, as a result of the risk associated with the Coronavirus, the mobile industry and its stakeholders are now taking stock as to what this precisely means for the market this year. MWC is one of the most important consumer electronics trade shows of the year, representing an industry that accounts for more than half of the $1 trillion+ consumer spend on electronic devices spent in 2019. Its cancellation will present a range of short- and medium-term challenges to the smartphone industry this year and could have far reaching consequences moving forward.

Firstly, it is worth highlighting that GSMA has taken an incredibly difficult decision and was caught between concerns for public health and its own financial well-being. As a not-for-profit, the lost revenue from the cancelled show will present challenges to GSMA, which was hoping that the Spanish authorities would cancel the show so they could recoup their losses through insurance. However, given that Spain has only two confirmed cases, at the time of writing, of the Coronavirus, and the fact that MWC accounts for around 1% of Barcelona’s revenue and over 14,000 temporary jobs, the authorities were keen for the show to continue. Moreover, GSMA was doing everything necessary to improve biosecurity at the event, with messaging around improved sanitation, a ‘no handshake’ policy, and deep cleaning the venue. What it couldn’t control, however, was the wider biosecurity of Barcelona, with over 75,000 attendees travelling and residing in the city for the duration of the event. GSMA has taken the decision both from an admirable public health perspective, but also as a result of the increasing rate at which exhibitors were dropping out of the show. Major players within the mobile industry, such as Ericsson, AT&T, Nokia and MediaTek had announced their intention to withdraw from the event before the cancellation, and while Samsung and Huawei both were determined to support the show, both vendors were already scaling back their presence given the diminished exhibitor list and expected lower visitor numbers limiting the value of the show.

For MWC’s exhibitors, the cancellation of MWC is the removal of a major marketing and networking opportunity, and this will disproportionately affect smaller businesses that will have invested a significant amount of their revenue in appearing at the show. While MWC is likely to refund its exhibitors, the lost marketing opportunity, as well as the removal of behind-closed-doors discussions with investors and potential partners, could present a challenge in the coming months to businesses that rely on trade shows for these opportunities. Larger companies will find these affects a more absorbable cost, but it does nevertheless present challenges to product releases and potentially limits their media exposure. Huawei, for example, uses MWC to promote their solutions in mobile networks and in devices, and rely on these events for PR reasons. Having been in the media as a part of the wider US-China trade war, and struggling internationally in 2019 as a result, they would have hoped to use MWC as a charm offensive to reverse the negative trends in its non-Chinese markets. Huawei will most likely still do a solo event, but circumstances mean the impact of this is likely to be muted.

MWC 2020 also represented the victory lap for 5G, as it is the first year of 5G being available to consumers in some markets worldwide. With 5G being a buzzword at MWC for the last few years, the actualisation of this new network technology meant that the show was poised to show real-life consumer and business applications, in the hope of raising consumer education and expectation as we move towards the middle of 2020. The smartphone market, having contracted for the last two sequential years, was in dire need of a win, with 5G expected to help stimulate the demand that returned the industry to a positive growth rate this year. The delayed product releases that will occur as the result of this show, as well as the supply side challenges surrounding the Coronavirus’ broader impact in China, could potentially delay the smartphone industry’s return to growth into 2021 if the current state of flux is not settled soon.

MWC is likely to remain the main hub of the mobile industry moving forward, with the lack of show this year more than likely resulting in heightened expectation and excitement in 2021. Of course, GSMA host other MWC events through the year, and MWC Shanghai, taking place at the end of June and start of July, will now take on added importance, as GSMA seeks to recoup its losses from Barcelona and reassert MWC as an essential event in the mobile industry’s calendar. There is, however, some concern that vendors may use the cancellation of MWC 2020 to forego MWC 2021. While this is an incredibly remote possibility given the value attendees derive from the show, if exhibitors have a successful 2020 without MWC and are able to make cost savings as a result, it may force rethinks around the value of attending in the future. This is of course contingent on vendors being able to successfully release new products, gain media traction and still maintain and build strong partnerships within the wider industry in spite of MWC’s cancellation, which will present challenges in the coming weeks and months as exhibitors re-evaluate their post-MWC strategy.

About the author

Stephen Mears

Stephen Mears is a Market Analyst at Futuresource Consulting, and is responsible for researching and reporting on key technology and market trends across the wearables, smartphone, and Extended Reality (XR) market. Alongside this, Stephen is also heavily involved in Futuresource’s retail distribution tracking service, assessing the retail landscape for consumer electronics products across major global markets.

Stephen joined Futuresource in 2018 after graduating from the University of Warwick with a Bachelor of Arts (BA) in Philosophy, Politics, and Economics. He is currently pursuing a part-time, distance Masters of Arts (MA) in International Relations & Contemporary War with King’s College, London.