Low iPhone Demand Hurts Foxconn’s First Quarter Sales

Hon Hai Precision a.k.a Foxconn has posted a 19% decrease in its first quarter sales as compared to last year, due to relatively low market demand for iPhone, reports Reuters. Laster year, Foxconn saw its sales topping the T$1 trillion mark during the first quarter while this year, the company’s sales totaled only T$808.97 billion.

KGI Securities analyst Ming-chi Kuo said that Foxconn did expect a quarterly decline, but a yearly decline is quite surprising. He added that this decline in sales shows how much Hon Hai’s revenue depends on Apple and the iPhone. Currently, Foxconn draws an estimated 60 to 70% of its revenue assembling the iPhones and iPads, and carrying out other work for the Cupertino company.

Kao expected the Taiwanese contract manufacturer to post flat sales in the second quarter compared with the first, adding that its net profit is also likely to come under pressure in the first half of this year.

Apple missed Wall Street’s revenue forecast for the December quarter. Disappointing holiday sales reinforced fears it is losing its dominance in smartphones.

Foxconn’s sales during the final quarter of 2012 totaled T$988.34 billion.