Foxconn chairman tells staff to expect 'feeble' iPhone sales until early 2017 - report

Posted:
in iPhone
The chairman of Hon Hai -- better known as Foxconn -- is reportedly telling subordinates that demand for Apple iPhones will stay weak until early next year, despite an anticipated fall launch for new models.




Terry Gou also told Chinese Premier Li Keqiang that Foxconn's overall orders were falling in 2016, with the exception of a rush in April and May, Japan's Nikkei said on Monday, citing sources. Foxconn is estimated to manufacture about 70 percent of iPhones, so while the firm does do assembly work for other companies, its fortunes can vary significantly based on Apple's performance.

One source described as with a "major supplier" claimed that iPhone shipments will slip to between 210 and 220 million this year, down by as much as 8.6 percent versus 2015.

Some Apple decisions are meanwhile causing problems in the supply chain, Nikkei added. The growing number of iPhone colors has resulted in inventory build-ups, according to one source, while Lin Chien-nan -- the president of former Apple touch module supplier Wintek -- suggested that the company's tendency to book extra orders can have the same effect.

"Apple is always overbooking its capacity. It works only when demand is strong. However, when demand softens, it leads to inventory correction for all the suppliers," he said.

Other sources claimed that Apple's upcoming "iPhone 7" generally lacks much innovation, although they backed reports that 5.5-inch models will have a dual-lens camera, enabling better zoom.

Apple experienced its first-ever year-over-year decline in iPhone sales during the March quarter, and many forecasts have been bleak about the iPhone's prospects, at least until this fall's iPhones have a chance to revive sales.
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Comments

  • Reply 1 of 23
    rogifan_newrogifan_new Posts: 3,670member
    Japan's Nikkei said on Monday, citing sources
    Stopped reading right there...
    anton zuykov
  • Reply 2 of 23
    blitz1blitz1 Posts: 410member
    Well, DED already claimed that form factor doesn't count,
    Soon he'll write an article in which he states that the inner workings don't count much either.
    IT'S THE SOFTWARE!
    mwhitesingularity
  • Reply 3 of 23
    Apple clearly doesn't always overbook; the iPhone 6 Plus supply shortages were a testament to that, (Admittedly, the 50% screen reject rate contributed) as was the Pencil supply shortages. 
  • Reply 4 of 23
    thedbathedba Posts: 462member
    When you release an uninspired product that looks like this year's and the year before of course sales YoY is expected to go down again.
    Uninspired? Because releasing newly looking hardware, just for the sake of releasing newly looking hardware, is innovation? 
    radarthekatmwhitenolamacguyTurboPGT
  • Reply 5 of 23
    ceek74ceek74 Posts: 323member
    "Foxconn chairman tells staff to expect 'feeble' iPhone sales until early 2017"...and then the 60,000 robots paused to reflect for 0.2ms before promptly returning to work.
    newtonrjfreshmaker
  • Reply 6 of 23
    frantisekfrantisek Posts: 368member
    Can somebody explain why should sales returns to growth at the beginning of 2017? Because of Chinese New Year?
    edited June 2016
  • Reply 7 of 23
    nolamacguynolamacguy Posts: 4,758member
    When you release an uninspired product that looks like this year's and the year before of course sales YoY is expected to go down again.
    really? TVs? home receivers? cars? most annual releases for all of those look like the previous year's, but updated in various ways. occasional big changes, but not annual.

    people who need their tools to look different from one year to the next are looking for toys.
    edited June 2016 ration alTurboPGT
  • Reply 8 of 23
    nolamacguynolamacguy Posts: 4,758member
    mj web said:
    Tim Cook was a competent "supply chain guy" now totally overwhelmed as CEO. Featuring too many SKUs and a chintzy product line -- Rose Gold MacBooks and Hermes watch bands, etc, he has no taste or vision. Cook is reverting Apple back to the same troubled company Steve Jobs had to rescue upon his return in the 90s. As I've pointed out ad infinitum, under Tim Cook "Apple actually is doomed!" It's just a matter of time before the deniers and apologist conclude, as CEO Cook is Apple's poison Apple.
    hello, troll! please find your FUD packets under your seat, containing the latest talking points you should be using.

    fact: unlike old Apple that Jobs had to rescue, Apple 3.0 (under Cook) continues to kill it, sucking up all the profit in multiple sectors. biggest sales. highest consumer ratings. etc etc. so much for Cook flushing it down the toilet...oops.
    ration albadmonkpatchythepirate
  • Reply 9 of 23
    TurboPGTTurboPGT Posts: 355member
    thedba said:
    When you release an uninspired product that looks like this year's and the year before of course sales YoY is expected to go down again.
    Uninspired? Because releasing newly looking hardware, just for the sake of releasing newly looking hardware, is innovation? 
    Yes, you nailed it. If it doesn't physically look dramatically different, its stale and worthless. That is what you'll get from about 1 out of 10 posters here, and 9 out of 10 posters on most other sites (from what I've seen).
    badmonk
  • Reply 10 of 23
    TurboPGTTurboPGT Posts: 355member

    When you release an uninspired product that looks like this year's and the year before of course sales YoY is expected to go down again.
    really? TVs? home receivers? cars? most annual releases for all of those look like the previous year's, but updated in various ways. occasional big changes, but not annual.

    people who need their tools to look different from one year to the next are looking for toys.
    Good analogy! The only other thing on the market that changes so wildly on the annual is: Toys! Because toys are made for fickle immature children who need new new new all the time, to satisfy their short attention spans. But that's fine, because they are children. Most of them won't be like as adults...most....

    Compare that to how often Tools change. Every year there are slight changes and innovations, but the core Tool remains the same, as its still serving the same purpose and accomplishing the same task(s).
    edited June 2016 nolamacguybadmonk
  • Reply 11 of 23
    TurboPGT said:

    really? TVs? home receivers? cars? most annual releases for all of those look like the previous year's, but updated in various ways. occasional big changes, but not annual.

    people who need their tools to look different from one year to the next are looking for toys.
    Good analogy! The only other thing on the market that changes so wildly on the annual is: Toys!
    Actually, anything to do with fashion changes very rapidly...and the iPhone/Apple Watch is as close to fashion in the tech industry as anything gets.
    aylk
  • Reply 12 of 23
    anton zuykovanton zuykov Posts: 1,030member
    Why would you spread that kind of info (true or not) that one of your major clients ordered (presumably) less units this cycle?
    How can Foxconn benefit from that? Is Foxconn bitter, that Apple is trying to talk with India about some production centers there?
    edited June 2016 patchythepirate
  • Reply 13 of 23
    slurpyslurpy Posts: 5,076member
    mj web said:
    Tim Cook was a competent "supply chain guy" now totally overwhelmed as CEO. Featuring too many SKUs and a chintzy product line -- Rose Gold MacBooks and Hermes watch bands, etc, he has no taste or vision. Cook is reverting Apple back to the same troubled company Steve Jobs had to rescue upon his return in the 90s. As I've pointed out ad infinitum, under Tim Cook "Apple actually is doomed!" It's just a matter of time before the deniers and apologist conclude, as CEO Cook is Apple's poison Apple.

    You have the exact same, incredibly shitty rant, in every single thread that you post in. I can't believe a spambot like you (that's exactly what you are) can retain posting privileges. You do nothing to elevate the level of discussion, beyond vomiting out garbage like this. Trust me, your "opinion" is not interesting or insightful enough to post a million times. Nasty, negative trolls like you have been declaring the "ITS ONLY A MATTER OF TIME" line since SJ's death in 2011, and 5 years later, Apple is infinitely more successful than it was at that time, in the most competitive industry on the planet. Cook has proven himself over and over again, unlike trolls like you who have absolutely nothing to show for your existence besides your smug, negative, baseless posts shitting on everything Apple and Cook. 

    By the way, Steve Jobs is the one who introduced "S" years and new colors to Apple's product line. New Macbook colors and bands? Wow, doomed. Also, maybe, just MAYBE the combination of technologies to achieve Apple's vision for the next major iPhone redesign is not quite ready for this fall, and instead of releasing a product with half of their vision, they smartly decided to stick with their vision, and release it when its ready. There is absolutely nothing wrong with retaining the general shell of the 6/6S with some cosmetic changes in the meantime, since that's all it is- a shell. Only people with severe ADD like you, who are insanely superficial and just want something to look different for the hell of it, without any rhyme, reason or benefits, are bothered by that.

    But no, you're probably right- nobody at Apple has any more ideas- not a single one- which includes some of the smartest and most creative people in the world, and that's why the iPhone 7 might look similar. That is the ONLY possible explanation. Thanks for enlightening us, troll. Hope you find some other hobby in your life soon, that can give you some joy, instead of copying and pasting your same shitty, predictable rant in every single thread. 
    nolamacguybadmonkpatchythepirate
  • Reply 14 of 23
    techlovertechlover Posts: 879member
    Why would you spread that kind of info (true or not) that one of your major clients ordered (presumably) less units this cycle?
    How can Foxconn benefit from that? Is Foxconn bitter, that Apple is trying to talk with India about some production centers there?
    Unless the deal linked below has completely fallen apart why would Foxconn be bitter?

    http://appleinsider.com/articles/16/05/09/new-foxconn-plant-in-india-to-exclusively-serve-apple-report-says
  • Reply 15 of 23
    zoetmbzoetmb Posts: 2,377member
    TurboPGT said:

    really? TVs? home receivers? cars? most annual releases for all of those look like the previous year's, but updated in various ways. occasional big changes, but not annual.

    people who need their tools to look different from one year to the next are looking for toys.
    Good analogy! The only other thing on the market that changes so wildly on the annual is: Toys! Because toys are made for fickle immature children who need new new new all the time, to satisfy their short attention spans. But that's fine, because they are children. Most of them won't be like as adults...most....

    Compare that to how often Tools change. Every year there are slight changes and innovations, but the core Tool remains the same, as its still serving the same purpose and accomplishing the same task(s).
    Yes, but tools don't sell well.   And actually, if you look at modern power tools, they've changed quite a bit with modular power supplies, better battery life, weight reduction, more specialty tools, etc.   And while smartphones and many other electronic devices are tools they're also most certainly "toys".   

    While I don't necessarily agree with many criticisms of Apple, the fact is that one of the reasons Apple achieved such extraordinary sales is because of consumers who bought every new smartphone model.   Without the smartphone, it's questionable whether Apple would still be a company, other than a small niche player.   And part of the reason to buy a new model is to "show off" that you have the latest and greatest.   But in order for that to be effective, the case design has to change so that other people can see that you have a new model, even if there's no practical or useful reason to change it.

    Having said that, I'm not personally interested in case design changes (and I don't replace my phone every year).   But I do feel that there's a definite perception that Apple is falling behind a bit.   If you look at the competition and regardless of the merits of any one perceived advantage, they seem to be making strides in wireless charging, charging speed, battery life, image quality, water resistance, audio quality and video quality that Apple has not yet made.   If I didn't hate Android so much, I myself might have switched.   Apple still seems primarily obsessed with how thin the case is and that it doesn't have any seams on the rear.   And if rumors are correct, it doesn't look like Apple will be making substantive improvements this year.   I do think that's a problem and I'm not seeing a lot of innovation coming out of Apple lately regardless of any rumors about cars.    

    I'm hoping the next MBPs are innovative because I'm typing this on a late-2008 MBP and I need a faster machine to deal with video.   In all other respects, I haven't yet seen enough value-add in more recent models (and in some respects, like the inability to change the battery, upgrade memory or switch out the drive, or the fact that solid state drives have less capacity per dollar than HDDs, they're worse) to replace this machine yet.   That tells me that Apple is not innovative enough.   I'm not generally a critic of Cook and I'm not aware of anyone who could replace him and do a better job, but I think he placed a big bet on the Apple Watch and that hasn't yet panned out very well.    Sometimes I wonder what all those Apple employees are actually doing.   Has Apple become so big that it's impossible to manage and as a result, efficiency has dropped?    

    I once took over an operation that was way over budget.   The I.T. team was from another division of the company and in addition to their own employees, they had contractors.  I was mandated to bring expenditures down and had no choice but to reduce the size of the I.T. team.   We let go 90 contractors.  The core team was reduced to about 22.   Output increased.  Why?   Because the small management team in charge could not manage 112 people - they had no idea what they were all doing day to day.  With 22 people, we met with everyone every morning and planned the day.    Apple might have become too large and if that's the case, things might actually get worse once they move into the new building and hire even more employees (even though one purpose of the new building is supposedly to consolidate leased space throughout the area).    


  • Reply 16 of 23
    anton zuykovanton zuykov Posts: 1,030member
    techlover said:
    Unless the deal linked below has completely fallen apart why would Foxconn be bitter?
    That was my point - there isn't really any reason to open his mouth that wide, yet the chairman did it anyway. 
    I was just wondering, if there is a specific reason other than him being someone who likes to talk, regardless of whether it is appropriate or not.

  • Reply 17 of 23
    techlovertechlover Posts: 879member
    techlover said:
    Unless the deal linked below has completely fallen apart why would Foxconn be bitter?
    That was my point - there isn't really any reason to open his mouth that wide, yet the chairman did it anyway. 
    I was just wondering, if there is a specific reason other than him being someone who likes to talk, regardless of whether it is appropriate or not.

    That is a fair point.

    I don't know if he has an obligation to the public share holders to disclose these things or not. 
  • Reply 18 of 23
    VisualSeedVisualSeed Posts: 217member
    I wonder how much of this is also due to Apple also utilizing other suppliers and assembly outsourcers. 
  • Reply 19 of 23
    VisualSeedVisualSeed Posts: 217member
    slurpy said:
    mj web said:
    Tim Cook was a competent "supply chain guy" now totally overwhelmed as CEO. Featuring too many SKUs and a chintzy product line -- Rose Gold MacBooks and Hermes watch bands, etc, he has no taste or vision. Cook is reverting Apple back to the same troubled company Steve Jobs had to rescue upon his return in the 90s. As I've pointed out ad infinitum, under Tim Cook "Apple actually is doomed!" It's just a matter of time before the deniers and apologist conclude, as CEO Cook is Apple's poison Apple.

    You have the exact same, incredibly shitty rant, in every single thread that you post in. I can't believe a spambot like you (that's exactly what you are) can retain posting privileges. You do nothing to elevate the level of discussion, beyond vomiting out garbage like this. Trust me, your "opinion" is not interesting or insightful enough to post a million times. Nasty, negative trolls like you have been declaring the "ITS ONLY A MATTER OF TIME" line since SJ's death in 2011, and 5 years later, Apple is infinitely more successful than it was at that time, in the most competitive industry on the planet. Cook has proven himself over and over again, unlike trolls like you who have absolutely nothing to show for your existence besides your smug, negative, baseless posts shitting on everything Apple and Cook. 

    By the way, Steve Jobs is the one who introduced "S" years and new colors to Apple's product line. New Macbook colors and bands? Wow, doomed. Also, maybe, just MAYBE the combination of technologies to achieve Apple's vision for the next major iPhone redesign is not quite ready for this fall, and instead of releasing a product with half of their vision, they smartly decided to stick with their vision, and release it when its ready. There is absolutely nothing wrong with retaining the general shell of the 6/6S with some cosmetic changes in the meantime, since that's all it is- a shell. Only people with severe ADD like you, who are insanely superficial and just want something to look different for the hell of it, without any rhyme, reason or benefits, are bothered by that.

    But no, you're probably right- nobody at Apple has any more ideas- not a single one- which includes some of the smartest and most creative people in the world, and that's why the iPhone 7 might look similar. That is the ONLY possible explanation. Thanks for enlightening us, troll. Hope you find some other hobby in your life soon, that can give you some joy, instead of copying and pasting your same shitty, predictable rant in every single thread. 
    I actually like the look of the iPhone 6/6s. Some year over year minor cosmetic styling changes are ok, but I'm more concerned with the guts and software which Apple has managed to improve every year. 
  • Reply 20 of 23
    croprcropr Posts: 871member
    thedba said:
    When you release an uninspired product that looks like this year's and the year before of course sales YoY is expected to go down again.
    Uninspired? Because releasing newly looking hardware, just for the sake of releasing newly looking hardware, is innovation? 
    Nevertheless, with the exception of the iPhone 6, the yearly improvements of the iPhone  have been less substantial in the last 4 years than the years before.  In the last 2 years the Android phones of in the $150 to $300 range have improved at a much faster pace, making it for Apple more difficult to justify the high price of the iPhone.  If the rumors are correct about the new features of the iPhone 7, I don't see users who switched from iPhone to Android in the last 12 months, come back quickly
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