Feb. 28, 2020, 7:09 p.m. EST

Will the shows go on? Coronavirus, MWC cancellation hang over tech conferences

Companies stand to lose money on cancellations, be forced to handle business that would get done at conferences in piecemeal fashion

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By Jon Swartz

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We may see more shows go by the wayside or scale back, says Ralph de la Vega, the former AT&T vice chairman who consults startups and introduces them to larger companies at trade shows.

“It’s crazy to promote events with a world-wide attraction,” he said. “It was wise of Mobile World Congress to shut it down. You can miss an event and make up for it with video calls. For a company employee to be infected has a much-longer impact on a business.”

Click here: For the latest on the economic effects of COVID-19

Videoconferences and individual meetings cannot typically replace what a conference provides, however. MWC, RSA and private events help tech companies roll out their products and business strategies to kick off the year, offering a blueprint on where they are headed. Think of it as a nerdy State of the Union address.

“It’s a painful loss of investment for smaller companies who devoted a large percentage of their budgets to attend,” telecommunications analyst Roger Entner told MarketWatch in a phone interview. “Many of them go to shows with the idea of walking the show floor for a chance meeting with a $50 billion company or to see and feel the pulse of a conference.”

A hole in the tech conference calendar could also hinder the development of new technology. This year’s edition of MWC, for example, was expected to highlight new 5G phones from nearly every major Android vendor, as well as updates about the networks running the ultrafast connectivity and what it means for consumers and enterprises. Now, there are concerns about a slowdown in the spread of 5G.

“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,” Futuresource Consulting analyst Stephen Mears warned.

Larger companies should survive with little to no repercussions. Samsung Electronics Co. Ltd. /zigman2/quotes/209800866/delayed KR:005930 +1.37% and Cisco Systems Inc. /zigman2/quotes/209509471/composite CSCO +1.56%  are typically two of the biggest names at MWC, but they announced products before MWC, as is typical. Samsung announced new foldable and 5G phones at an event in San Francisco in early February, while Cisco shared its new products and services at a conference in San Jose in December.

See also: Samsung prices cheapest new Galaxy smartphones at $1,000

“It’s not really that big a deal for us,” Cisco Chief Financial Officer Kelly Kramer told MarketWatch in a phone interview.

But what about a startup without the resources of a Samsung or Cisco that can’t afford a Plan B?

They resort to remote meetings, as Light CEO Kaiwei Tang is doing. His company launched a simplified 4G phone in November and promoted it at CES. But after planned meetings with Rogers Communications Inc. /zigman2/quotes/204125556/delayed CA:RCI.B -0.72%  and Vodafone Group /zigman2/quotes/202862751/composite VOD +1.13%  fell through in Spain, he is speaking to them via phone and hopes to conduct more meetings at the South by Southwest show in Austin, Texas, next month.

“Mobile World Congress is where global carriers go. There is no real replacement,” Tang told MarketWatch in a phone interview. “I’m kinda sad they canceled it, but I understand it was the sensible move.”

Software company WalkMe last week announced the radical solution of a nine-hour virtual conference Feb. 26 in lieu of MWC that will let dozens of startups and large companies present their products online. In all, 120 have expressed interest in participating, including AppsFlyer and OpenLegacy Inc.

“We toyed around with the idea of presenting ourselves, but decided to invite others,” Rafael Sweary, co-founder and president of WalkMe, told MarketWatch in a phone interview. “We put $200,000 into a booth that won’t be used. This is a big thing that is difficult for everyone.”

Read: How the stock market has performed during past viral outbreaks

The cities that host these events could face problems as well. Facebook’s canceled marketing conference typically brings about $11 million in spending to San Francisco, with about 5,000 attendees expected to stay at 10 hotels, according to San Francisco Travel Association, which also lamented other losses. Mobile World Congress, by comparison, is estimated to be worth about $540 million to Barcelona and provides 14,000 part-time jobs for local workers.

“Naturally we are disappointed by [IBM’s] decision. A short-term cancellation will have an impact on hotels, restaurants, retail stores and attractions,” Joe D’Alessandro, president and CEO of San Francisco Travel, said in a statement.

Facebook and Apple hold their conferences at the San Jose McEnery Convention Center . According to Team San Jose, F8 and WWDC helped contribute to the more than $130 million that conferences and events brought to San Jose hotels, restaurants, shops, and attractions in 2018.

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Jon Swartz is a senior reporter for MarketWatch in San Francisco, covering many of the biggest players in tech, including Netflix, Facebook and Google. Jon has covered technology for more than 20 years, and previously worked for Barron's and USA Today. Follow him on Twitter @jswartz.

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