there's this little virus out there in the world that seems to be messing with
more than a few things but today what I'm going to tell you about is how
that's going to impact you as someone with a lot of tech and a lot in your
smart home
hello Automators thanks for tuning in again I'm Brian from Automate Your Life
and today I'm going to take the frustration out of automation by telling
you about a virus? I know it seems strange but to be honest what I'm seeing
in the market right now what I'm seeing with contacts in the industry is telling
me a bit of a story and I wanted to share that with you today
now I'm by no means a healthcare professional and so I'm not going to
comment on the virus or how any of these things are being handled I'm really not
here for that and I can barely take care of myself health-wise so we're really
not here for that are we folks so what we're going to talk about more is the
realities of what's gone on in China and is now starting to go on in other parts
of the world and how that's going to impact you so let's get going see if I
break down the situation for you Chinese New Year ended on February 8 this year
and largely that's when people go back to work otherwise before that and for a
pretty extended period of time people are gone they're out of the office
they're not working lots of components of businesses are shut down in a lot of
ways and I mean that's new year pretty much everywhere around the world but for
people in China this is an extended period of time
now the Wuhan quarantine had been on for about two weeks at this point and this
issue was spreading out further and further and there was more and more
people staying home and really what happened was lots of these people never
went back to work or at least that's what I've observed and that's what I've
been told by a number of people in the industry see what usually happens when
Chinese New Year ends and I get to see this firsthand as a youtuber and as a
tech youtuber specifically those people come back in the attack that occurs on
my email and in every different communication method I have it's really
intense all these people come back and they are hungry for sales they want to
get products out and they want to get marketing happening for their products
usually I'm sitting here at this point in the year wondering how am I going to
work with all these companies and filtering out lots of them that I'm not
going to work with so you know that's what I'm used to and what happened this
year was complete and utter silence there was literally nothing in my
mailbox and that didn't make any sense we've had great growth here on automate
your life so it didn't make any sense and I started to reach out to different
people as you heard the news they weren't responding they weren't at
work and the responses I did get were few and far in between and yes very
serious about the situation now I'm recording this on March 5th and I will
tell you that this is still going on today what's more is this is going on in
all parts of the business it's not just the marketers or the salespeople staying
home this is going on in lots of parts of businesses throughout China still
today the the expected horsepower for manufacturing right now in a lot of
these companies is around 30% this week that's the expectation for a lot of tech
companies chip producers PCB board manufacturers all of that industry
they're talking about getting to 30% capacity right now now these people are
still not in the office all the time and when they are they're focused on things
that are trying to kind of get the business back moving in a lot of cases
because they have had these down times that were seriously extended so it's not
business as usual even now and I don't think it will be for a lot of March
what's funny - is that the shipping process for a lot of products has slowed
as well and has slowed to the point where even if these companies have
inventory available because they've managed to get manufacturing either to
occur before Chinese New Year or they've managed to
some manufacturing capacity during this time what's funny is the shipping
processes are not occurring anyways there's a lot less coming across in
terms of these kinds of tech products so it's not just the manufacturing but it's
also the shipping that's being impacted now just imagine as other companies
start to have this situation and it does appear that this is going on you can
look at South Korea which has obviously major impacts for companies like Samsung
but it also tends to be a downstream component manufacturer or a final
component assembly a lot of the marketing a lot of the R&D for companies
like Samsung and there's lots of countries right around this area that
are starting to feel the impacts that are downstream components of
manufacturing so it's not like as China comes out of this and gets out of this
situation that the rest of the manufacturing and shipping and all of
these processes will just return to normal if these companies start or these
countries start to have these issues we will see this problem continue now with
all of this said what's going on and how does this matter to you
so first I'm gonna start out with the companies companies are already talking
about large companies are already talking that they are missing
expectations for profit and for revenue this is already occurring and they're
saying is sometimes you don't even have to read the fine print that this little
virus is messing with so much for them that they are way off expectations and
that means they're going to have to do something about that because that's
never okay and we're seeing effects in the stock market already based on
statements like this but you know for you personally you don't really care
what a bottom line of a company is you care how it affects your bottom line and
I'm getting to that here before I move on though I want to start a new segment
here on automate your life within our weekly news videos and this is intended
to be a resource for you it's intended to give you something that you can
action today and get something out of it now I'm
going to let someone name Montana who's going to introduce herself to you guys
do this weekly segment and I'm really excited to start this off so let us know
what you think about this now without further ado here's Montana your life I'm
an up-and-coming news and sports reporter so I hope that some of my work
background can have some value for you this little virus well it's not so
little anymore over ninety nine thousand people have
already been affected and there are so many people who haven't even been
diagnosed yet as the numbers continue to grow and this virus continues to spread
people are taking extra precautions before going out in public the affected
areas can be found on a map that is constantly being updated so if you think
someone around you may have it well you may not be wrong back to Brian thanks
Montana let's get back to the impacts though so I'm going to give you three
impacts very specifically to the smart home industry and you in general now
number one we are already seeing events canceled and a lot of events Google just
cancelled Google i/o at least as a public event in their amphitheater there
it's gone it's done we're not having Google i/o this year like we have in
past years and we have seen other conferences get canceled the companies
these big tech companies are already restricting travel and actually have
canceled travel in a lot of cases to anyone going outside of their country so
this is already creating an isolating effect in a lot of different ways and
those events being canceled will mean that announcements that you were
expecting and I was expecting could be delayed here and specifically I mean
that really is a big deal for Google they have to find a way to still get
these announcements out because they have a lot on the line so they're
talking about backfilling with some kind of online event and I'll keep you up to
date on that but these events being canceled will matter two announcements
product announcements service announcements all kinds of impacts there
the lack of products getting out of China or getting out of the overall
manufacturing process again if this hits other countries as
appears to be this will continue to cause companies to miss sales
expectations but it will also cause inventory levels around the world to
drop so what we are looking at is initially a drop or a continuing drop of
inventory levels around the world and we'll talk more in depth about what I
see this pattern looking like in terms of inventory levels and sales and things
like that but you can expect inventory levels to continue to decline the third
impact is related to new products coming out and I can tell you firsthand right
now there are a couple of products that I know that we're in R&D phase or within
kick starters that are now being delayed and we will continue to see this because
not only are the manufacturing people out of office but the R&D people are out
of office and they're not able able to travel they're not able to head to
conferences to create connections that they need there's a lot of restrictions
going on here and it's causing companies to miss their previous guidance or
expectations not only on sales but on product releases so they can't announce
something they don't have and they can't make something because they can't get it
done and wise is the latest example of that with their keypad for the wise lock
being delayed already now let's talk more in depth about inventory levels and
sales and things like that because this is what will affect your bottom line the
most for a while we can pretend that this is going to end relatively soon
China will get back to normal they will not be our relapse of impact in terms of
this virus in that country and we'll pretend that other countries aren't
going to get hammered by this even though it kind of looks like that and a
lot of countries right now let's pretend for a moment what we've had is this a
massive loss of sales revenue of inventory of manufacturing of overall
capacity for the year and a lot of companies are going to be sitting there
wondering what to do other than we got to make money on the small company side
what I've already seen in the smart home industry
is a real loss of overall cash and and I think this was always expected for these
smaller companies you know they got investment they got investment a few
years ago and now they're starting to run out of some of that cash in some
cases and I get I'm not going to mention names I've put this out there with my
patrons in the past and I can't mention names this is just my sense and this is
not you know people telling me we're out of money this is what I've seen just
being a youtuber and working with these companies a little bit so the smaller
companies I feel like are going to be in a real pinch in some cases and this
might cause the end of a couple of these smaller companies now as you kind of
move bigger in the scale you know a bigger company that's flush with money
and I can name a bunch here Google and Amazon and Apple and Samsung and you can
even get into companies like wise that are continuing to get sales they're
continuing to have pretty good cash flow overall as a business those companies
are going to be fine but what they're going to look at is that missed
expectations and you know I think as you get later and later in the year
q3 q4 they're going to be looking at it and they're going to have held pretty
strong to prices because they don't have the inventory during q1 q2 and probably
into q3 a little bit they haven't had the inventory to put on any sales so you
come into q3 you look at it you're really missing revenue expectations
you're really missing profit expectations what do you do as a company
you try to blow out a lot of inventory in a lot of different ways so I think
we'll see that later in the air really hit hard but initially as these
inventory levels continue to drop down and as companies continue to have less
and less products retailers have less and less products those sales won't go
on when you look at a country like Canada versus the US just because of our
sheer size the amount of people that we have we're not going to get the same
inventory levels as somewhere in the US with so much mark
access so I think the lack of inventory is going to hit smaller markets even
harder and you can say this in general there's lots of history and trends
behind this but what that means is product certain products are with with
high demand low supply and even lower supply now because of all of this that
pricing model could get way out of hand and I think we're already starting to
see it on a couple of products I've noticed a couple starting to trend up
here in Canada already and the other thing is lots of retailers go and they
buy up lots of inventory too so you will probably see in countries like Canada
and in relatively isolated markets you're going to see inventory drop so
low that prices will skyrocket so you're going to want to watch out for this I
think so if I kind of summarize shipping manufacturing is way low right now out
of China and it could get worse with other countries becoming infected so to
speak with this little virus it will continue to impact a lot of different
markets and a lot of different ways tech is going to be delayed as a result and
so is a lot of R&D I think conferences are being cancelled and really in the
end we're not going to see sales here of any sort of magnitude for a number of
months and this could mean drastic pricing changes depending on where you
are probably less in the bigger markets but more in the smaller markets and we
really have to have a look later in the year I think in terms of our buying
power around this as long as this situation does not continue so I hope
that's a good summary rate there and if you guys have more questions leave them
down below now of course I'm going to keep you up to date in 2020 as we
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