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Foxconn Sales Fall First Time In 25 Years, Is Apple To Blame For The Dip?

11 January 2017, 10:10 pm EST By Abhijeet Kar Tech Times
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Apple's assembly partner Foxconn has reported a $136.38 billion revenue for 2016, which is a 2.8 percent slide from 2015. Foxconn's sales have slid for the first time since 1991.  ( Sean Gallup | Getty Images )

Foxconn, Apple's primary assembly partner, has recorded a 2.8 percent dip in its revenue in 2016 when compared with the same period in 2015. The company recorded a $136.38 billion revenue for 2016. 

On Tuesday, Jan. 11, Foxconn shared the news. This is the first time that Foxconn's annual sales have seen a slide in the last 25 years.

Is Apple To Blame?

It is being suggested that the decrease in Foxconn's revenue stream can be attributed to a low demand from Apple before its iPhone 7 arrived.

Apple's CEO Tim Cook is also reported to have received a pay cut of almost $1.5 million for failing to achieve the internal goals of the company. Industry insiders also believe that such a move is due to the dwindling fortunes and slowing down of sales for the Cupertino-based company. 

The 4.7-inch iPhone 6s, which was launched in September 2015, integrated many improvements with features like Live Photos, 4K video recording, and 3D Touch. The upgrades were regarded as an average move by Apple.

The iPhone 6s was seen as a tough device to sell to both existing iPhone users, as well as Android users looking for a top-end device.

In December 2016, Foxconn experienced a year-over-year growth of about 9.8 percent, which may largely be due to the demand for the iPhone 7 Plus that sports some top-notch features such as a dual-camera setup.

Earlier in January, we reported that in a regulatory filing with the U.S. Securities and Exchange Commission , Apple revealed that it had missed both the revenue and operating income targets.

"Apple delivered another year of strong financial results in 2016. However, the two financial measures used to evaluate executive performance under our annual cash incentive program, net sales and operating income, declined from our record-breaking 2015 levels," explained Apple. 

Even though the iPhone was the most-wanted gifted during the holiday season, this was not sufficient to compensate for the lean phase Apple encountered in 2016.

Apple is reportedly cutting down iPhone 7 and iPhone 7 Plus production orders in 2017 by 10 percent. Why? Apparently, the lineup allegedly sold far more "sluggishly" than expected according to reports. This does not augur well for Foxconn as it means that the company will have fewer units of the iPhone 7 and iPhone 7 Plus for assembling. This in turn translates to lower revenue generation for the Apple partner.

Will Foxconn be able revive its fortunes with the impending arrival of the iPhone 8? Only time will tell.

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