Foxconn, an Apple supplier, predicts a decline in quarterly sales as iPhone concerns increase

The iPhone 15 was launched in September and received mixed initial reviews in crucial markets.

Hon Hai Precision Industry, also known as Foxconn, anticipates a fourth consecutive decrease in quarterly sales following a 5.4% drop in the final quarter of 2023, suggesting that consumer electronics demand remains subdued. In December, the Taiwanese company reported a significant 27% reduction in sales to NT$460.1 billion ($14.8 billion crore), ending the NT$1.85 trillion quarter. The company now foresees sales declining in the current period also, raising concerns about the newest iPhone’s traction entering the new year.

As Apple’s primary iPhone manufacturing partner, Foxconn’s performance sheds light on overall consumer demand for personal technology devices. The iPhone 15’s debut in September received mixed responses in key markets: it sparked an upgrade cycle from previous models in the US, while sales in China declined.

In 2023, China will once again be a focal point for iPhone challenges—the ban on iPhones and other Apple products within Chinese agencies and state-supported firms has expanded, and local tech titan Huawei Technologies is reclaiming market share with its premium Mate 60 series.

Investor confidence was shaken at the end of last year when Foxconn became the subject of a Chinese regulatory investigation that increased anxiety among foreign companies operating within the country. The Taiwanese device manufacturer is also contending with its Chinese competitor Luxshare Precision Industry, which plans to expand its iPhone production capabilities.

According to Counterpoint Research associate director Liz Lee, iPhone sales are expected to grow by only 2% this year, lagging behind the overall mobile market growth of 5%. Meanwhile, Huawei’s smartphone sales are predicted to increase by 37%. This week, Barclays and Piper Sandler downgraded Apple due to weak demand for the latest iPhone.

Foxconn’s dependence on Apple for most of its revenue is evident—its total sales in 2023 amounted to NT$6.16 trillion, a 7% decline.