Following Apple's decline, Foxconn reports first sales dip in 25 years
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.
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.
Comments
Now the main reasons to get a new phone are to get HD voice, wifi-calling, Apple Pay, more storage, and other features.
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.
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.
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.
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.
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 will still outperform most current Android phones.
Beware the headline referring to the past while the story downplays the present/future.