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Foxconn Reports First Ever Profit Decline on Back of Slow iPhone Sales in 2016

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Apr 12, 2001
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Following a year filled with doom and gloom stories surrounding Apple and its first revenue decline in thirteen years, major iPhone supplier Foxconn Technology Group has reported its own first ever sales decline since the company went public in 1991. In a report by Nikkei, "lukewarm demand" for the iPhone 7 and a "saturated smartphone market" are said to be to blame for Foxconn's downturn.

In total for 2016, Foxconn's revenue of 4.356 trillion New Taiwan dollars (approximately $136 billion) was down 2.8 percent from its 2015 earnings. As a slight bright spot, its revenue for December grew 9.8 percent year-on-year because of increased user spending for the approaching Chinese New Year holidays, "and the relatively robust demand for the 5.5 inch iPhone 7 Plus model."

foxconn-iphone-7.jpg

Apple's overall revenue decline in 2016 also included the company's first year-over-year decline in iPhone sales -- the first ever dip in profit for the iPhone. The lowering of demand for the smartphone directly impacted the company's manufacturing partners, with analyst Vincent Chen reporting that in total 207 million iPhones were shipped in 2016, down from 236 million in 2015. That's even lower than what Nikkei predicted midway through last year -- believing shipments would total between 210 and 220 million.

There's expected to be a turn around this year, however, with Chen predicting Foxconn's revenue to grow between 5 and 10 percent on the back of "healthier demand" for the tenth-anniversary iPhone. Apple and its products account for more than 50 percent of Foxconn's revenue.
"Look forward to 2017, we think Foxconn's revenue could grow by 5% to 10%," said Chen. The growth drivers for the current year will come from healthier demand for the next iPhone 8 and a mild rebound in the PC market, according to Chen. Foxconn is also the world's biggest desktop assembler.

For 2017, iPhone's shipment could rise to some 221 million, said Chen.
Click to expand...
A lack of "compelling" features for the iPhone 7 was said to be the main reason why many Galaxy Note7 owners decided to stay in the Samsung family when those devices began malfunctioning. After the events of the Samsung Galaxy Note7 crisis began subsiding, analysts criticized Apple for failing to capture new customers into its ecosystem from the churning Note7 user base.

Article Link: Foxconn Reports First Ever Profit Decline on Back of Slow iPhone Sales in 2016
 
Article Link
https://www.macrumors.com/2017/01/10/foxconn-first-ever-profit-decline/
2499723

2499723

Cancelled
Dec 10, 2009
812
412
Foxconn should credit itself for constructing such a quality iPhone 6 that I didn't feel compelled to upgrade! That said, my phone was replaced after just under 2 years due to a dodgy battery. Thank you EU consumer law (while it lasts in the UK)! But yes, perhaps it's also the fact that the iPhone 7 was wholly 'uncompelling'.
 
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JaySoul

JaySoul

macrumors 68030
Jan 30, 2008
2,629
2,865
Apple need to justify the constant price increases.

The 7 is a really good phone but compare it to the OnePlus 3T (in fact, compare the 7, S7, Pixel, all these high priced phones) and suddenly "value for money" becomes an issue.
 
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N

now i see it

macrumors G4
Jan 2, 2002
10,638
22,202
Still making fisfulls of billions of dollars but 2.8% less than last year and it's all doom & gloom.
 
Mr. Dee

Mr. Dee

macrumors 603
Dec 4, 2003
5,990
12,828
Jamaica
The iPhone 7 is a great upgrade, all revisions from 2008 up to now have all been great. Its just that, for what most users do with a computer or smartphone - I personally fall into the average category - I don't need to have the latest and greatest. My iPhone 6s takes great pictures already, way better than my 14 megapixel canon powershot. I spend most of my time on social media: Facebook, Twitter, Instagram and I am sure these are no better on a 7 vs a 6s. Physical design is important, but I don't think it necessarily justifies spending disposable income on a new version every year. I am sure iOS 11, 12 and 13 will all support my 6s. So, I will just squeeze as much value as I can until Apple decides to no longer support. The average user outside of the Macrumors is very practical. The 900 I would spend on a Plus, is going straight towards my pension plan. Tim, Cue, Ive and Schiller all have enough already.
 
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capathy21

capathy21

macrumors 65816
Jun 16, 2014
1,418
617
Houston, Texas
That's what happens when you release the same device 3 years in a row. Of course the internals/cameras are much improved with each generation, but the average consumer judges by how it looks. The fact that the device wasn't redesigned, and still has those huge bezels is ridiculous. I love my iPhone for the software, but the hardware is now dated and needs to change.
 
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