Foxconn’s August Revenues Decline, Upcoming iPhone 5 Launch Reportedly to Blame
According to a report by Digitimes, Foxconn, the maker of Apple’s iPhone and iPad, announced their consolidated revenues for August ($7.5 billion USD), but experienced a drop of 10.6 percent for the month.
The reason for the August decline? According to “market watchers” the drop is related to a “major client transitioning its existing smartphone product to a new model”:
Although Foxconn noted that all its product lines are shipping accordingly to its clients’ demands, some market watchers believe the revenue decline was due to a major client transitioning its existing smartphone product to a new model and should recover after the new smartphone enters the retail channel.
I’m sure you can read between the lines. As one of Foxconn’s major clients, Apple’s upcoming iPhone 5 drastically reduced the demand for the existing iPhone 4S based on early leaks in the supply chain. Less iPhone 4S upgrades and purchases would mean less revenue for Foxconn. It’s just that simple.
As noted in the report, Foxconn should ‘recover’ once the next phone is launched and is available for purchase. If a new reported iPad Mini is involved, you can bet revenues to increase even further.
At the end of August, Reuters reported Foxconn and Sharp were set to invest $1 billion towards the production of next generation LCDs for iOS devices. Last week Foxconn remained in the spotlight, as it responded to allegations it was forcing interns to work on the iPhone 5. The company continues to accept razor thin profit margins of roughly 1.5% to retain Apple as a client.