Foxconn expects sales to fall as iPhone doubts grow
Foxconn is reliant on Apple for the bulk of its revenue
Hon Hai Precision Industry Co. warned of its fourth consecutive decline in quarterly sales after a 5.4% slide in the last three months of 2023 suggested consumer electronics demand remains muted.
The Taiwanese firm, also known as Foxconn, reported a steep 27 per cent drop in December sales to NT$460.1 billion ($14.8 billion), concluding a NT$1.85 trillion quarter. It now sees sales falling in the current period as well, adding to concern about the latest iPhone generation's momentum heading into the new year.
As Apple Inc.'s foremost iPhone assembly partner, Foxconn provides insight into broad consumer demand for personal tech. Apple's iPhone 15 went on sale in September, to a mixed early reaction in key markets: the US saw it kickstart an upgrade cycle from earlier iterations while sales in China declined.
China will again be a focal point of challenges for the iPhone this year, as the ban on the handset and other Apple hardware in China has widened and local tech giant Huawei Technologies Co. is reclaiming market share with its premium Mate 60 series.
Foxconn has also been the subject of a regulatory investigation in China. The Taiwanese device builder is facing a growing challenge from Chinese rival Luxshare Precision Industry Co., which is set to expand its iPhone production capacity.
iPhone sales volume is likely to grow 2 per cent this year, short of the overall mobile market growth of 5 per cent, according to Counterpoint Research associate director Liz Lee. Huawei's smartphone sales, on the other hand, are expected to grow 37 per cent. This week, Barclays and Piper Sandler cut their ratings for Apple due to soft demand for its latest iPhone.
Foxconn is reliant on Apple for the bulk of its revenue. Its cumulative sales in 2023 were NT$6.16 trillion, down 7 per cent.