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Hon Hai/Foxconn sees 19 percent drop due to lower iPhone demand

updated 10:29 am EDT, Wed April 10, 2013

Company's fortunes linked closely to Apple products

Taiwan-based manufacturer Hon Hai -- better known under its lead brand Foxconn -- posted a 19 percent fall in sales year-over-year during the first quarter, Reuters reports. Revenue reached T$808.97 billion, a decline from T$1 trillion in Q1 2012, as well as the T$988.34 billion the company posted in Q4. The drop is being blamed on lower demand for the iPhone.

"A quarterly decline was expected, but not a yearly decline," comments KGI Securities' Ming-chi Kuo. "This shows that Hon Hai's revenue depends too much on Apple, and iPhone orders corrected more than expected." The analyst is predicting that Hon Hai sales will stay flat quarter-over-quarter in Q2.

Hon Hai is estimated to generate about 60 to 70 percent of all its revenue from Apple contracts, mainly assembling iPhones and iPads. The slip in iPhone demand may be based on a combination of factors. Aside from an expected post-holiday slump, Apple is facing more intense competition from Android phones like the Samsung Galaxy S III, and some critics have complained that the iPhone 5 is little different from the iPhone 4S, beyond major cosmetic changes.



By Electronista Staff
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  1. Geoduck

    Junior Member

    Joined: 01-14-10

    Android competition..

    Or it could be due to the smartphone market approaching saturation and the technology peaking. A couple of years ago upgrading regularly was a big deal. When the iPhone 3 came out, owners of the original and second gen saw huge improvements. Upgrading even though the old one was working was a reasonable choice. Today the iPhone 5 is a nice device, but if you own a 4 or 4S, well, the pressure to upgrade is much less. They are nice systems too and if you have one, keeping it for a year or two more until it breaks or you can't run something you want to is a very reasonable option. I suspect a lot of people are waiting until until they NEED to upgrade, hence a slowdown.

  1. thinkman

    Fresh-Faced Recruit

    Joined: 01-04-05

    ELECTRONISTA SUCKS

    Another unsubstantiated rumor using Apple's iPhone as the scapegoat!

  1. hayesk

    Professional Poster

    Joined: 09-17-99

    Yearly decline bogus

    iPhone releases are no longer on a strict yearly schedule, so a yearly decline could be warranted.

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