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Foxconn sees 19% decline in sales after 'disappointing' demand for Apple's iPhone

post #1 of 78
Thread Starter 
Sales were down 19 percent in the first quarter at Foxconn, manufacturer of devices for Apple and others, in a decline that was reportedly driven primarily by lower iPhone sales.

Total sales were $808.97 billion Taiwan, or $26.96 billion U.S., at Hon Hai Precision Industry Co. Ltd., also known as Foxconn, in the quarter spanning from January to March, according to Reuters. The 19 percent year-over-year decline was attributed to "disappointing demand for the iPhone" in the report published on Wednesday.

Foxconn


Cited in the report was KGI Securities analyst Ming-chi Kuo, who indicated that a quarterly decline was expected, but a year-over-year drop was not. It's estimated that as much as 70 percent of Foxconn's revenue comes from assembling Apple's popular iPhones and iPads.

"This shows that Hon Hai's revenue depends too much on Apple, and iPhone orders corrected more than expected," Kuo said.

The news will likely further drive speculation that Apple could disappoint with its own forthcoming quarterly earnings. The company is set to report its own earnings for the January-to-March quarter on April 23.

As pessimism around Apple has grown, some market watchers have predicted that the company could potentially miss its own guidance for its second fiscal 2013 quarter. That's prompted some analysts to cut their price targets, while major shareholders have sold some of their positions in the iPhone maker.
post #2 of 78
http://appleinsider.com/articles/13/03/25/apple-product-refreshes-boost-foxconn-to-record-32b-profit
post #3 of 78
That truly is fantastic news for the stock ¡

I thought Foxconn wasn't the only manufacturer?
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post #4 of 78

That's profit; leading others to a conclusion that there is indeed an Apple Tax.
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post #5 of 78
47.8m * 0.81= 38.7m. Still on top of most estimates for this Q.
Oops YoY, not QoQ...
post #6 of 78
Sales were down 19 percent in the first quarter at Foxconn, manufacturer of devices for Apple and others, in a decline that was "reportedly"
driven primarily by lower iPhone sales.

I hate it using the passive voice , it means nobody will have to be responsible . It is highly believable that it is a makeup story as no source is given to prove the truth .
Edited by crazy_mac_lover - 4/10/13 at 5:50am
post #7 of 78
It appears this is an analyst's assumption and not a statement from Foxconn

Apple is 60% of Foxconn's business. Foxconn accounts for 70% of iPhone builds

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post #8 of 78
Ok so Foxconn didn't say this, some Wall Street analyst did. I thought Foxconn just manufactured for Apple. What are the sales exactly?
post #9 of 78
So much shorting of Apple, so little time.

I heard from someone close to a source at Apple that they have "run out of ideas", that "things are desperate", and that "sales are down 75% since a while back". /s

#talkdownaapl
post #10 of 78
Quote:
Originally Posted by Rogifan View Post

Ok so Foxconn didn't say this, some Wall Street analyst did. I thought Foxconn just manufactured for Apple. What are the sales exactly?

 

Foxconn manufactures stuff for everybody and their grandmother. Not just Apple.

post #11 of 78
Quote:
Originally Posted by DCGOO View Post

Foxconn manufactures stuff for everybody and their grandmother. Not just Apple.
No I meant I thought that's all they did for Apple. So, sales of what exactly are down 18%?
post #12 of 78
Maybe Apple had Foxconn over-produce in the previous quarter.
post #13 of 78

I warned Cook last year that if he didn't include the flux capacitor there would be a significant drop off in sales in the later quarters.
 

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post #14 of 78

according to Reuters.

 

If you read the actual Reuters story,  there is no evidence journalism,   entirely fabricated speculation by the writer.  

Why AI republishes this garbage as fact is beyond all integrity.    

 

Foxconn sales could be affected by a number of events having nothing to do with " attributed to "disappointing demand for the iPhone" 

Since they do not break out sales,  or offer guidance as to future business the writer is guessing at best.    Clealy a planted story to knock

down the stock price.    

post #15 of 78
What seems to be undeniable is that the IPhone 5 isn't selling as well as previous versions in Apple's core markets. You could say that it hasn't been perceived as a big enough upgrade versus the 4S to persuade existing customers to switch. I remember someone describing the iPhone 5 as iPhone 4s ii.

I don't think the 5S can get away with being simply the same iPhone 5 design with a bump in specifications. There is genuine demand for an iPhone line-up that offers a range of screen sizes.
post #16 of 78

At the same time, it would be no wonder. It takes more that an aluminum casing and a (slightly) larger screen to tempt people into changing their not-so-old phone.

Compared to the bump iPhone 3 ➜ 4, the transition iPhone 4 ➜ 5 is just a plain botch.

post #17 of 78
Quote:
Originally Posted by Tailpipe View Post

What seems to be undeniable is that the IPhone 5 isn't selling as well as previous versions in Apple's core markets. You could say that it hasn't been perceived as a big enough upgrade versus the 4S to persuade existing customers to switch. I remember someone describing the iPhone 5 as iPhone 4s ii.

I don't think the 5S can get away with being simply the same iPhone 5 design with a bump in specifications. There is genuine demand for an iPhone line-up that offers a range of screen sizes.
What stats do you have to back this up? Apple doesn't break out sales by model. All we know is 1) in the first weekend of sales the iPhone 5 broke the previous record set by the iPhone 4S, and 2) the ASP last quarter wasn't significantly lower than previous quarters. What factual data points do you have which indicates iPhone sales are soft because Apple doesn't offer a bigger screen size?
post #18 of 78

Apple Go Private! Apple Go Private!

 

At this point when they announce that, I literally want Tim Cook to walk off the stage flipping the bird to the shareholders.

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post #19 of 78
Went to the Apple store yesterday and NOBODY was at the iPhone table. The phones were sitting there untouched.
post #20 of 78
Originally Posted by ralphdaily View Post
Went to the Apple store yesterday and NOBODY was at the iPhone table. The phones were sitting there untouched.

 

Apple is obviously doomed¡ 1rolleyes.gif

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post #21 of 78
Quote:
Originally Posted by ralphdaily View Post

Went to the Apple store yesterday and NOBODY was at the iPhone table. The phones were sitting there untouched.

Saw the same thing at my local store too. It has been more or less the case since the holiday. Everyone was either at the iPad tables, or the Mac section. Tim Cook needs to reveal a bit of his "pipeline choke full of great products" to the world. Otherwise we will end up the same like last year, when Apple launched 6 major products back to back in the span of a few months.

post #22 of 78
Originally Posted by zoffdino View Post
Tim Cook needs to reveal a bit of his "pipeline choke full of great products" to the world.

 

Your implication being that Apple has never gone this long without a product change before?


Otherwise we will end up the same like last year, when Apple launched 6 major products back to back in the span of a few months.

 

Your implication being that this is somehow "bad"?

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post #23 of 78
Amazon stock is still rising fast.

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

 

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post #24 of 78
Quote:
Originally Posted by Tailpipe View Post

What seems to be undeniable is that the IPhone 5 isn't selling as well as previous versions in Apple's core markets. You could say that it hasn't been perceived as a big enough upgrade versus the 4S to persuade existing customers to switch. I remember someone describing the iPhone 5 as iPhone 4s ii.

So your friends are idiots. The iPhone 5 is dramatically different than the iPhone 4S.

Regardless, you're just plain wrong. The iPhone 5 has outsold previous versions handily. So your 'undeniable fact' is just plain wrong.
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post #25 of 78
Quote:
Originally Posted by jragosta View Post

So your friends are idiots. The iPhone 5 is dramatically different than the iPhone 4S.

Regardless, you're just plain wrong. The iPhone 5 has outsold previous versions handily. So your 'undeniable fact' is just plain wrong.

1) I think the iPhone 5 is the large YoY change the iPhone has seen.

2) Up until the iPhone 4S Apple had stated that each new model had outsold every other previous model, combined. I expect that to hold for the 6th gen iPhone, too.

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

 

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post #26 of 78
Quote:
Originally Posted by Tailpipe View Post

What seems to be undeniable is that the IPhone 5 isn't selling as well as previous versions in Apple's core markets. You could say that it hasn't been perceived as a big enough upgrade versus the 4S to persuade existing customers to switch. I remember someone describing the iPhone 5 as iPhone 4s ii.

I don't think the 5S can get away with being simply the same iPhone 5 design with a bump in specifications. There is genuine demand for an iPhone line-up that offers a range of screen sizes.

But the 5 isn't meant for 4S upgraders. It is for those people who are sick of Android, those who have dumb phones, and those who have older iPhones.
post #27 of 78
Quote:
Originally Posted by ralphdaily View Post

Went to the Apple store yesterday and NOBODY was at the iPhone table. The phones were sitting there untouched.
And how long were you at the store watching the iPhone tables? I went to the Apple store the day the ipad mini came out to buy it for my parents. I went early in the morning figuring there might be a line but the store was basically empty. Got in and out with a new mini in 10 minutes.
post #28 of 78
Quote:
Originally Posted by zoffdino View Post

Saw the same thing at my local store too. It has been more or less the case since the holiday. Everyone was either at the iPad tables, or the Mac section. Tim Cook needs to reveal a bit of his "pipeline choke full of great products" to the world. Otherwise we will end up the same like last year, when Apple launched 6 major products back to back in the span of a few months.
If products aren't ready how can Apple reveal them? I doubt Apple has things ready to go that they're purposely holding back so they can cram them all in to the holiday quarter.
post #29 of 78

An earlier AI story regarding Ipad 5 screen production contains an interesting notation:

 

"The supposedly leaked pictures come on the heels of mounting rumors that Apple is preparing to begin production of the next-generation tablet this month ahead of a release in July or August. "

If I speculate with one data point.....

 

Apple accelerated Ipad5 production to next month and drew down inventories of other Ipad models in this Q  

 

Or Apple dismal sales for Ipad 4,  leads to accelerated rollout of Ipad 5 to stop the slide......

 

"Speculate amongst yourselves"    

 

As TC said: "it’s good to question the accuracy of any kind of rumor about build plans. And I’d also stress that even if a particular data point were factual, it would be impossible to accurately interpret the data point as to what it meant for our overall business, because the supply chain is very complex, and we obviously have multiple sources for things. Yields might vary, supplier performance can vary, the beginning inventory positions can vary, I mean there’s just an inordinately long list of things that would make any single data point not a great proxy for what’s going on"

post #30 of 78
Quote:
Originally Posted by AppleInsider View Post


"This shows that Hon Hai's revenue depends too much on Apple, and iPhone orders corrected more than expected," Kuo said.

 

The analyst doesn't even know what "corrected" means, so I don't expect much from the analysis. True, when the word is used in reference to securities markets, it typically denotes a decline, but it's a decline to where it should be, following a period of inflated prices.

 

I also disagree with the analyst's conclusions, given that we already know that it was outselling the 4S last time numbers were provided. This could be in part attributable to a faster international roll-out, but a 19% decline in sales that's entirely the result of slower iPhone sales would mean that iPhone sales were down more than 19%, since Foxconn does more than just assemble iPhones, and all public data so far shows that it has been selling very well.

post #31 of 78
Quote:
Originally Posted by Retrogusto View Post

The analyst doesn't even know what "corrected" means, so I don't expect much from the analysis. True, when the word is used in reference to securities markets, it typically denotes a decline, but it's a decline to where it should be, following a period of inflated prices.

 

I also disagree with the analyst's conclusions, given that we already know that it was outselling the 4S last time numbers were provided. This could be in part attributable to a faster international roll-out, but a 19% decline in sales that's entirely the result of slower iPhone sales would mean that iPhone sales were down more than 19%, since Foxconn does more than just assemble iPhones, and all public data so far shows that it has been selling very well.


All public data? To the best of my knowledge there isn't any data for the last quarter that is any less speculative than the above analysis.

 

Another 2 weeks and we'll know.

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post #32 of 78

It's because everyone wants choice OLEDs phablets. 

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post #33 of 78

Great. I've been waiting for this. Now wait till AAPL drops I'll jump in right before the announcement.

post #34 of 78
Quote:
Originally Posted by ralphdaily View Post

Went to the Apple store yesterday and NOBODY was at the iPhone table. The phones were sitting there untouched.

 

Which means precisely zero. What are you implying and why?

post #35 of 78
Quote:
Originally Posted by Rogifan View Post

Ok so Foxconn didn't say this, some Wall Street analyst did. I thought Foxconn just manufactured for Apple. What are the sales exactly?

There are some 75 or so companies that use Foxconn.

Including Microsoft, Dell, Nintendo.

So perhaps the issue is that the Surface etc are the issue. Not the iPhone which is likely at its normal sales. Even the iPad is likely normal since sales always dropped in Jan-Feb cause folks believed new ones were coming any day.
post #36 of 78
Quote:
Originally Posted by Tailpipe View Post

What seems to be undeniable is that the IPhone 5 isn't selling as well as previous versions in Apple's core markets. You could say that it hasn't been perceived as a big enough upgrade versus the 4S to persuade existing customers to switch. I remember someone describing the iPhone 5 as iPhone 4s ii.

I don't think the 5S can get away with being simply the same iPhone 5 design with a bump in specifications. There is genuine demand for an iPhone line-up that offers a range of screen sizes.

 

Why is it undeniable? Because you think so? Making such a statement requires at least some corroboration. You sound like the analysts who pull stuff out of thin air and publish it as fact. 

post #37 of 78
When I said that i would sell 20% of my Apple Stock at 460. Some people called me dumb.
post #38 of 78
Quote:
Originally Posted by Rogifan View Post

No I meant I thought that's all they did for Apple. So, sales of what exactly are down 18%?

What they produced.

It's a language thing. They track production as sales for accounting purposes.
post #39 of 78
Quote:
Originally Posted by charlituna View Post

What they produced.

It's a language thing. They track production as sales for accounting purposes.
Ah, ok got it. Has Foxconn ever commented the cause of production being up or down? I'm assuming they can't say anything that would give too much of an insight into iPhone sales, considering they manufacture for more than just Apple.
post #40 of 78
Quote:
Originally Posted by ralphdaily View Post

Went to the Apple store yesterday and NOBODY was at the iPhone table. The phones were sitting there untouched.

That means nothing about actual sales. Folks in your area could be waiting for the official T-Mobile phones with the 3G chip turned on, which go on sale on Friday

Or it could just mean that folks were there to buy the phone but didn't need to try it first. Especially with the plague worthy amount of germs typically on those things
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