Apple manufacturer Foxconn sees second quarterly fall, unlikely connected to iPhones
Foxconn posted disappointing net profits for the June quarter on Monday, though the results may not be directly connected to its biggest client, Apple.
Foxconn recorded profits of $567.25 million, down from about $580.8 million a year ago, Reuters said. The figure was even further below a $711.45 million mean estimate compiled from nine analysts polled by Thomson Reuters.
Apple could potentially be a factor given its outsized importance, but the company shipped 41.3 million iPhones during the same quarter, a small but significant increase year-over-year. Apple's increased shipments have probably improved Foxconn's results compared to if Apple's shipments remained static.
It is likely that the reduced profits stem from operations relating to its other clients. While Apple is a major customer, Foxconn also assembles devices for a number of other firms, with one or more equally likely to have negatively impacted the company's finances.
At least some iPhone production has been diverted to Wistron, and that firm may even be making a portion of this fall's new iPhones. There's also the potential that Foxconn has had to spend extra on equipment and hiring to keep up with Apple's demands.
This fall is expected to see the launch of three new iPhones: 5.8- and 6.5-inch OLED models, plus a cheaper 6.1-inch LCD device. All of these should have edge-to-edge displays and TrueDepth and Face ID, even though the latter is thought to have been responsible for the delayed launch of the iPhone X. The phone arrived in early November, well after the Sept. 22 ship date for the iPhone 8 and 8 Plus.
Foxconn recorded profits of $567.25 million, down from about $580.8 million a year ago, Reuters said. The figure was even further below a $711.45 million mean estimate compiled from nine analysts polled by Thomson Reuters.
Apple could potentially be a factor given its outsized importance, but the company shipped 41.3 million iPhones during the same quarter, a small but significant increase year-over-year. Apple's increased shipments have probably improved Foxconn's results compared to if Apple's shipments remained static.
It is likely that the reduced profits stem from operations relating to its other clients. While Apple is a major customer, Foxconn also assembles devices for a number of other firms, with one or more equally likely to have negatively impacted the company's finances.
At least some iPhone production has been diverted to Wistron, and that firm may even be making a portion of this fall's new iPhones. There's also the potential that Foxconn has had to spend extra on equipment and hiring to keep up with Apple's demands.
This fall is expected to see the launch of three new iPhones: 5.8- and 6.5-inch OLED models, plus a cheaper 6.1-inch LCD device. All of these should have edge-to-edge displays and TrueDepth and Face ID, even though the latter is thought to have been responsible for the delayed launch of the iPhone X. The phone arrived in early November, well after the Sept. 22 ship date for the iPhone 8 and 8 Plus.
Comments
Finally, most of these expectations involve the word “cheaper” don’t they; a cheaper iPhone, a cheaper MacBook, a cheaper iPad, a cheaper headless Mac.
It looks like Foxconn is loosing more and more customers due to all the resource they have to give Apple. Even Apple is beginning to allocate production to other contract manufacturers.
Interesting. Got any links for that?
Nominee for The NSE Awards!
I also love how an additional post pours cold water on this post. Foxconn can expect to gain tremendously if the report is correct that they'll have a hand in producing the vast majority of the three new iPhones predicted coming this Fall.