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First, we had iPhone component makers slash demand forecasts late last year. Next, Apple (NASDAQ:AAPL) pulled a rare move (at least for Apple) and lowered its own guidance down just two days in the new year. Next up, Foxconn.
Now we are seeing some hard proof of reduced global iPhone shipments. Foxconn (TPE:2354) just reported a sizeable revenue loss of 8.3 percent, good for a loss of over one-and-a-half billion USD year over year... for the month. Foxconn does nearly $200 billion a year in revenue.
Foxconn revenue down over 8 percent from lagging iPhone shipments
Foxconn, formerly known as Hon Hai Precision, is almost as well known as Apple these days and is the rather infamous Taiwanese-based manufacturer of iPhones and other Apple-designed products. They are perhaps Apple's most important and key supplier and could be viewed as a strategic partner for the world's second most valuable company.
The firm's primary plant is located in Zhengzhou, China and in the past has employed as many as 350,000 Chinese workers to build up to half a million iPhones a day, good for 350 phones per minute. Foxconn is said to collect nearly 80 percent of its revenue from Apple products, and it's clear that since both Apple component suppliers (who would be selling to Foxconn) and Apple itself slashed forecasts that lagging iPhone sales are to blame here.
Foxconn would not say exactly why revenues slipped in December...
The main reason is that the fall for consumer [products] category was rather big
-Foxconn Representative
We can say that based on Apple's report on Chinese demand, it's not quite a global iPhone crisis as much as it is a Chinese consumer crisis. iPhone sales numbers there are plummeting as new entrants from Chinese rivals Huawei and others continually improve on quality and feature sets and sway customers away from iFruit products. It's just a bit ironic that in the very same country iPhones are churned out, losses are seeming to mount for the Cuppertino, CA-based tech giant.
