Following Apple's decline, Foxconn reports first sales dip in 25 years

Posted:
in General Discussion
Foxconn, Apple's main assembly partner, on Tuesday declared its first-ever annual sales decline since going public in 1991, something reportedly linked to weak demand from Apple prior to the arrival of the iPhone 7.




Foxconn's 2016 revenues were $136.38 billion, 2.81 percent lower than in 2015, according to Nikkei. Apple accounts for over 50 percent of Foxconn's revenue, closely linking the two companies.

While Apple tried to put a positive spin on the situation, last year it posted its first annual sales decline since 2001, something directly related to lower iPhone sales. The latter problem was regularly blamed on lukewarm demand for the iPhone 6s.

Slowing sales even led Apple to issue a pay cut for its executive team, including CEO Tim Cook, whose compensation was docked by $1.5 million for failure to meet the company's internal goals.

While the 6s introduced improvements like Live Photos, 4K video recording, and 3D Touch when it launched in Sept. 2015, it was generally seen as a modest upgrade from the iPhone 6 and a tough sell both for existing iPhone owners and people considering high-end Android phones.

Foxconn's Dec. 2016 revenues did grow 9.76 percent year-over-year however, which Nikkei tied to "relatively robust demand" for the iPhone 7 Plus. The Plus has a dual-lens camera, which not only magnifies images but enables a special Portrait mode with simulated, DSLR-like bokeh (blurred backgrounds).

Nikkei previously reported that Apple was cutting iPhone 7 orders by 10 percent for 2017, despite allegedly not being able to keep up with 7 Plus demand. That claim could be explained by Pegatron's December figures -- the supplier, which assembles the standard iPhone 7, saw its revenues plummet 27.43 percent year-over-year.
«1

Comments

  • Reply 1 of 33
    Was it courage?
  • Reply 2 of 33
    zonezone Posts: 17member
    This is so stupid... stop making it sound like the company is going out of business. A sales decline of an amazing number is still amazing! Apple make a larger profit in 1 quarter than most companies out there. Stop trying to manipulate the stock...
    StrangeDaysGrimzahnmagman1979macxpresswatto_cobraMacPro
  • Reply 3 of 33
    Pretty loaded language in this story. Correlation != causation. Also from what I read elsewhere Cook wasn't "docked pay", he just didn't earn as much bonus.
    edited January 10 magman1979anantksundarambrakkenwatto_cobra
  • Reply 4 of 33
    zone said:
    This is so stupid... stop making it sound like the company is going out of business. A sales decline of an amazing number is still amazing! Apple make a larger profit in 1 quarter than most companies out there. Stop trying to manipulate the stock...
    Stop taking a company so seriously like it's life or death. It's just a freaking company. No need to have that much emotional attachment to it. I like what they make and use a lot of the products but don't get bent out of shape if anyone says anything good or bad about them. There are much other things in the world to care about more than a company.
    avon b7yelloliongatorguydasanman69
  • Reply 5 of 33
    zone said:
    This is so stupid... stop making it sound like the company is going out of business. A sales decline of an amazing number is still amazing! Apple make a larger profit in 1 quarter than most companies out there. Stop trying to manipulate the stock...
    Stop taking a company so seriously like it's life or death. It's just a freaking company. No need to have that much emotional attachment to it. I like what they make and use a lot of the products but don't get bent out of shape if anyone says anything good or bad about them. There are much other things in the world to care about more than a company.
    How do you know he's being emotional about it? How do we know you aren't? Etc. It's no lie that Apple seems to generate an unusual amount of negatively-spun articles, aka DOOM, presumably to generate more traffic across the web. It's not emotional to point this out, and note that nobody knows and Apple isn't DOOMed.
    calimagman1979stompybestkeptsecretwatto_cobra
  • Reply 6 of 33
    Many users in the U.S. are now keeping their mobile phones longer due to the elimination of the two year subsidies that used to be offered. In the past we could turn in our old iPhone for $250 or so which paid for the $200 upfront cost of the subsidized plan for a new phone. 

    Now the main reasons to get a new phone are to get HD voice, wifi-calling, Apple Pay, more storage, and other features.
    brakkenwatto_cobra
  • Reply 7 of 33
    As near as I can tell, Apple isn't the only company Foxconn deals with. Acer, Bell, Cisco, BlackBerry, Google and Microsoft are some of the American customers Foxconn has and there are numerous other companies from all around the world. I simply do not understand why they keep tying in Foxconn to only Apple as though Apple's fortunes are Foxconn's fortunes and vice-versa.  If Apple were Foxconn's only customer then there would be no doubt.

    If Apple is responsible for 50% of Foxconn's revenues, there's still the other 50% that could also be dragging down Foxconn's revenues and there's no way of telling for sure where the greatest damage is being done. Foxconn customers, Nokia, BlackBerry and Nintendo could seriously be hurting Foxconn due to poor product sales. It just seems rather lame to always be placing the blame directly on Apple unless Foxconn comes out and says that Apple is the company to blame for major lost revenue.
    edited January 10 fracavon b7magman1979StrangeDaysbrakkenadamcwatto_cobra
  • Reply 8 of 33
    zone said:
    This is so stupid... stop making it sound like the company is going out of business. A sales decline of an amazing number is still amazing! Apple make a larger profit in 1 quarter than most companies out there. Stop trying to manipulate the stock...
    Stop taking a company so seriously like it's life or death. It's just a freaking company. No need to have that much emotional attachment to it. I like what they make and use a lot of the products but don't get bent out of shape if anyone says anything good or bad about them. There are much other things in the world to care about more than a company.
    I find your lack of integration disturbing...
    watto_cobra
  • Reply 9 of 33
    Pretty loaded language in this story. Correlation != causation. Also from what I read elsewhere Cook wasn't "docked pay", he just didn't earn as much bonus.
    When it comes to Mr. Cook's pay, that's correct.

    Some have framed it as though Apple (presumably the Board) decided to cut his pay because the company didn't meet its performance targets. That's just not the case. He actually got a pay raise for 2016 (which was approved last year), his base salary went from $2 million to $3 million. Like all Apple's executive officers, he can get a bonus of up to 400% of his base salary if the company meets its highest revenue and operating income targets. That's what happened the year before and in several prior years. But this past year the company only met the lower revenue and income targets. Apple sets 3 targets for each. If it hits the lower one, executives can get a bonus of 100%. If it hits the middle one, they can get a 200% bonus. If it hits the highest one, they can get a 400% bonus. Apple fell a tad short of the middle target on operating income and about $8 billion short of the middle target on revenue. So executives got a 179% bonus instead of the 400% bonus they got last year.
    apple jockeyStrangeDayswatto_cobra
  • Reply 10 of 33
    fracfrac Posts: 431member
    As near as I can tell, Apple isn't the only company Foxconn deals with. Acer, Bell, Cisco, BlackBerry, Google and Microsoft are some of the American customers Foxconn has and there are numerous other companies from all around the world. I simply do not understand why they keep tying in Foxconn to only Apple as though Apple's fortunes are Foxconn's fortunes and vice-versa.  If Apple were Foxconn's only customer then there would be no doubt.

    If Apple is responsible for 50% of Foxconn's revenues, there's still the other 50% that could also be dragging down Foxconn's revenues and there's no way of telling for sure where the greatest damage is being done. Foxconn customers, Nokia, BlackBerry and Nintendo could seriously be hurting Foxconn due to poor product sales. It just seems rather lame to always be placing the blame directly on Apple unless Foxconn comes out and says that Apple is the company to blame for major lost revenue.
    Exactly. But being partial is a requirement in tech journalism these days. 
    watto_cobra
  • Reply 11 of 33
    The one thing that bothers me about their phone line up is the up sell mentalitiy of the plus.  I own a plus, so its all good for me, but my wife doesn't like big phones.  She wanted the better camera but opted to get the regular sized phone with disappointment set in from the start.  Now that she's had it for a while, she hates it even more and wants to go back to the even smaller 5s size she had previously.   But the current phone Apple sells at that size is so old specked, there is no chance.  She would be willing to pay the same price of the plus for a smaller phone with similar specs as the 7plus, but Apple doesn't sell anything remotely like that.  It looks like her next phone will be an Android.

    Point being,  phone size shouldn't be the determining factor of which products get better stuff unless of course its a physical constraint making it impossible.
    80s_Apple_Guy
  • Reply 12 of 33
    altivec88 said:

    Point being,  phone size shouldn't be the determining factor of which products get better stuff unless of course its a physical constraint making it impossible.
    You just answered your own complaint in that last statement, and if her next phone is going to be Android just because of size, I feel sorry she's willing to make such a MASSIVE sacrifice, a very foolish one.

    And BTW, the iPhone SE isn't "so old specked", that's a complete pile of horse shit. It's got the guts of a iPhone 6S, which STILL murders almost every Android clunker on the market.
    edited January 10 stompyapple jockeyneil andersonwatto_cobra
  • Reply 13 of 33
    As near as I can tell, Apple isn't the only company Foxconn deals with. Acer, Bell, Cisco, BlackBerry, Google and Microsoft are some of the American customers Foxconn has and there are numerous other companies from all around the world. I simply do not understand why they keep tying in Foxconn to only Apple as though Apple's fortunes are Foxconn's fortunes and vice-versa.  If Apple were Foxconn's only customer then there would be no doubt.

    If Apple is responsible for 50% of Foxconn's revenues, there's still the other 50% that could also be dragging down Foxconn's revenues and there's no way of telling for sure where the greatest damage is being done. Foxconn customers, Nokia, BlackBerry and Nintendo could seriously be hurting Foxconn due to poor product sales. It just seems rather lame to always be placing the blame directly on Apple unless Foxconn comes out and says that Apple is the company to blame for major lost revenue.
    It's likely that the (annual) revenue drop is partially due to Apple and partially due to Foxconn's other customers. We know, with a good bit of confidence, that Foxconn's revenue fell about (the equivalent of) $1.76 billion for the first quarter of 2016 and that about $.94 billion of that was from Apple. I wouldn't necessarily expect that that ratio held for the entire year, but I would expect the annual drop to be due in part to Apple. Foxconn won't file its annual report for a few months, but when it does we'll have more detailed numbers for the whole year - meaning, how much of the revenue drop came from Apple.
  • Reply 14 of 33
    altivec88 said:

    Point being,  phone size shouldn't be the determining factor of which products get better stuff unless of course its a physical constraint making it impossible.
    You just answered your own complaint in that last statement, and if her next phone is going to be Android just because of size, I feel sorry she's willing to make such a MASSIVE sacrifice, a very foolish one.

    And BTW, the iPhone SE isn't "so old specked", that's a complete pile of horse shit. It's got the guts of a iPhone 6S, which STILL murders almost every Android clunker on the market.
    Take it easy dude.

    We upgraded last year.  So I got a 6S Plus and she got a 6S.   Camera looks to be the same size to me?  but mine got image stabilization and hers doesn't.   Can't see why that couldn't be offered in a 6S size.   We were upgrading from 5s's so going from a 5s to to a 5se just to get a little faster wouldn't make much sense.  We never had big phones.  I love the plus and will continue to get them.  She gave the regular 6S a go and found it to big.  What can I say.   Believe it or not, the way the phone fits in peoples hand (i.e. screen size) is a major deal for some people.   
  • Reply 15 of 33
    sflocalsflocal Posts: 3,574member
    altivec88 said:
    Take it easy dude.

    We upgraded last year.  So I got a 6S Plus and she got a 6S.   Camera looks to be the same size to me?  but mine got image stabilization and hers doesn't.   Can't see why that couldn't be offered in a 6S size.   We were upgrading from 5s's so going from a 5s to to a 5se just to get a little faster wouldn't make much sense.  We never had big phones.  I love the plus and will continue to get them.  She gave the regular 6S a go and found it to big.  What can I say.   Believe it or not, the way the phone fits in peoples hand (i.e. screen size) is a major deal for some people.   
    The SE is an iPhone 6 in an iPhone 5 package.  There is nothing "outdated" about it.  It's a modern phone and for you to imply it's some outdated piece of tech because It looks like an iPhone 5 from the outside is ignorant.

    The SE will still outperform most current Android phones.
    StrangeDaysneil andersoncaliwatto_cobra
  • Reply 16 of 33
    sflocal said:
    altivec88 said:
    Take it easy dude.

    We upgraded last year.  So I got a 6S Plus and she got a 6S.   Camera looks to be the same size to me?  but mine got image stabilization and hers doesn't.   Can't see why that couldn't be offered in a 6S size.   We were upgrading from 5s's so going from a 5s to to a 5se just to get a little faster wouldn't make much sense.  We never had big phones.  I love the plus and will continue to get them.  She gave the regular 6S a go and found it to big.  What can I say.   Believe it or not, the way the phone fits in peoples hand (i.e. screen size) is a major deal for some people.   
    The SE is an iPhone 6 in an iPhone 5 package.  There is nothing "outdated" about it.  It's a modern phone and for you to imply it's some outdated piece of tech because It looks like an iPhone 5 from the outside is ignorant.

    The SE will still outperform most current Android phones.
    You guys are completely missing my point.   When comparing Apple phones to Apple phones, if I want to buy a small iPhone today and I'm willing to pay unlimited $ to get the best of the best.  I must choose a 5se over a 7plus.   Are you saying the components in these phones are the same or that none of them could be put into the smaller form factor?  If you are okay that they treat the small one as 2nd class compared to their other phones (even though its still a good phone) then thats great.  I would like to see them update all 3 phone sizes to look and match each other the best they physically can and let consumers choose the size they want without sacrificing other components for no apparent reason.
  • Reply 17 of 33
    zone said:
    This is so stupid... stop making it sound like the company is going out of business. A sales decline of an amazing number is still amazing! Apple make a larger profit in 1 quarter than most companies out there. Stop trying to manipulate the stock...
    Stop taking a company so seriously like it's life or death. It's just a freaking company. No need to have that much emotional attachment to it. I like what they make and use a lot of the products but don't get bent out of shape if anyone says anything good or bad about them. There are much other things in the world to care about more than a company.
    This is what I think about when I hear my co-workers and friends talk about their sports teams.  But people have their passions and there is nothing wrong with it.  We care equally about the world as well as Apple and the companies it partners with.
    StrangeDayswatto_cobra
  • Reply 18 of 33
    The important take away from this article is that Foxconn reported December 2016 (iPhone 7) revenue up 9.76% over December 2015 (iPhone 6S) revenue.  Assuming that metric is consistent with the quarter's performance, iPhone 7 will exceed iPhone 6S December 2015 results by about 7 million units.

    Beware the headline referring to the past while the story downplays the present/future.
    neil andersoncaliwatto_cobra
  • Reply 19 of 33
    I should have pointed out in my earlier post that Foxconn's 9.76% YoY growth in December is all the more spectacular considering that Samsung (who also uses Foxconn) completely, and unexpectedly, shut down Note 7 production earlier in the quarter.
    watto_cobra
  • Reply 20 of 33
    As near as I can tell, Apple isn't the only company Foxconn deals with. Acer, Bell, Cisco, BlackBerry, Google and Microsoft are some of the American customers Foxconn has and there are numerous other companies from all around the world. I simply do not understand why they keep tying in Foxconn to only Apple as though Apple's fortunes are Foxconn's fortunes and vice-versa.  If Apple were Foxconn's only customer then there would be no doubt.

    If Apple is responsible for 50% of Foxconn's revenues, there's still the other 50% that could also be dragging down Foxconn's revenues and there's no way of telling for sure where the greatest damage is being done. Foxconn customers, Nokia, BlackBerry and Nintendo could seriously be hurting Foxconn due to poor product sales. It just seems rather lame to always be placing the blame directly on Apple unless Foxconn comes out and says that Apple is the company to blame for major lost revenue.
    Acer, Bell, Cisco, Blackberry, Google and Microsoft did not report significant sales declines, or never had significant volume to begin with. Microsoft in ended their mobile business in 2015, so there would have been no declines for them to report in 2016 to drag Foxconn down. Also, if Foxconn makes products for Google, I would like to know what they are. Google's primary hardware partners are HTC and Asus, along with whoever they get to manufacture Nexus products (which are generally branded companies like HTC, Asus, Samsung, Motorola, Huawei etc. and not the likes of Foxconn). Bottom line: if everyone else sold about the same volume or didn't have much volume to begin with as they did in 2015, AND if Apple, their highest volume by far, had a decline, then it is an easy correlation to make.
    dasanman69singularity
Sign In or Register to comment.