Foxconn, the main manufacturer of Apple, discloses a 5.4% year-on-year dip in revenues across its entire spectrum of businesses for Q4 2023.
This slump includes a decline in iPhone sales, a trend that the Taiwanese firm anticipates extending into Q1 2024, citing subdued demand.
A 'Flatish' Performance For Foxconn
Taiwan-based consumer electronics manufacturer Foxconn has seen a huge on-year drop on its Q1 revenue. The plight happened when iPhone demand fell during the period.
Despite initial optimism surrounding the iPhone 15 launch, Foxconn's Q4 2023 results fell short of expectations.
As Reuters writes in its recent report, the term "flatish" describes the overall revenues, which contracted by 5.4% year over year, settling at $59.54 billion.
While this figure is below the previous year's performance, Foxconn interprets it as a relatively favorable outcome.
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Steep Decline Starts in December 2023
The most alarming revelation emerges from December 2023, marking a staggering 26.9% year-on-year decline in revenue, culminating in $14.84 billion. This substantial drop signals a critical downturn in the peak month's financial performance.
Foxconn's representatives express a cautious outlook for Q1 2024, anticipating a continued decline in demand across its various businesses, including the flagship iPhone.
While Q1 traditionally witnesses reduced sales post-holiday season, Foxconn's projection suggests broader economic factors and component price hikes may contribute to this trend.
Analysts Echo Concerns and Downgrade Apple
Amid Foxconn's warnings, market analysts, including Piper Sandler and Barclays investment bank, align their assessments with a pessimistic tone, according to Apple Insider.
Economic uncertainties and escalating prices of essential components such as RAM and Flash chips prompt concerns about Apple's performance in the first half of 2024.
Barclays Cautions Against iPhone 16 Anticipation
Barclays investment bank goes a step further, expressing skepticism about the latter half of 2024. Without clear indicators of groundbreaking features in the rumored iPhone 16 range, analysts at Barclays foresee challenges for Apple in maintaining consumer interest.
With Foxconn struggling to keep up with the revenue decline for now, this year could be challenging for Apple, especially in the coming quarters.
The intersection of economic factors and market dynamics suggests that the Cupertino giant may need to navigate carefully to sustain its momentum in the industry.
Outside its iPhone manufacturing business, Foxconn is set to build a sub-$ $30,000 EV known as Fisker's Pear.
Back in September, the company decided to reach out to Fisker in hopes of creating an electric car in the US. However, since then, deals have yet to be finalized between the two parties.
The only information we got at that time is that Fisker announced that the EV's production would take place on US soil, particularly in the Ohio factory.
The production of the Pear car is expected to start by 2025. For more reports about Foxconn, click here to see more updates you don't want to miss.
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