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

Discussion in 'MacRumors.com News Discussion' started by MacRumors, Jan 10, 2017.

  1. MacRumors macrumors bot

    MacRumors

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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."

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    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.
    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
     
  2. manhattanboy macrumors 6502a

    manhattanboy

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    #2
    More colors. They obviously need more phone colors.
     
  3. lenard macrumors 6502

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    #3
    Why the iPhone, I thought that Foxconn was in business doing other products.....
     
  4. mac1984user macrumors 6502a

    mac1984user

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    #4
    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'.
     
  5. JaySoul macrumors 68020

    JaySoul

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    #5
    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.
     
  6. Andres Cantu macrumors 68020

    Andres Cantu

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    #6
    Should have made a blue iPhone rather than jet black.
     
  7. forcesteeler macrumors 6502

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    #7
    Dont see a surprise. Apple is not hungry anymore, If they don't come hard this year its over. look at amazon and google. The Alexa is killing Siri.
     
  8. Derekuda macrumors 6502

    Derekuda

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    #8
    LMAO!!! And what was that horse ess that Phil was saying just yesterday about being unmatched etc.... Suck it Apple! Face it, you've lost your innovation and "magic" touch!
     
  9. wallysb01 macrumors 65816

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    #9
    Have we finally hit peak iPhone? Maybe Apple will give some attention to the Mac now?
     
  10. ka-spot macrumors 6502a

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    #10
    I'm still with iPhone 6... with today's inovative Apple (and rumors for the iPhone 8) I just can't wait to skip it too..
     
  11. lordofthereef macrumors G4

    lordofthereef

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  12. Shaun, UK macrumors 68030

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    #12
    That's what happens when you deviate from the previously successful policy of updating the iPhone design every 2 years. I couldn't see a single reason to upgrade my iPhone 6 to the 7.
     
  13. masterhiggins macrumors regular

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    #13
    They need to perfect re-animation so we can get jobs back. At the very least, clone someone from his DNA.
     
  14. now i see it macrumors 65816

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    #14
    Still making fisfulls of billions of dollars but 2.8% less than last year and it's all doom & gloom.
     
  15. Paul Dawkins Suspended

    Paul Dawkins

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    #15
    Well it is expensive and there is no need to change phone every year.
     
  16. Mr. Dee macrumors 65816

    Mr. Dee

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    #16
    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.
     
  17. chriscrk macrumors 6502

    chriscrk

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    MacRumors comments is about to have a field day with this news.
     
  18. smacrumon macrumors 68030

    smacrumon

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    #18
    But it's 2017 now, and change is in the Air.
     
  19. Aldaris macrumors 65816

    Aldaris

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    #19
    That should have been project "Titan"
     
  20. iapplelove macrumors 68030

    iapplelove

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    #20
    I agree, but I don't think it's just iPhone. Smart phones all around have hit a peak. There really hasn't been anything ground shaking in some time now.
     
  21. capathy21 macrumors 65816

    capathy21

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    #21
    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.
     
  22. smacrumon macrumors 68030

    smacrumon

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    #22
    The price reached a psychological wall for many customers a number of years ago in my opinion. The price must be dropped $200 next new release.
     
  23. lordofthereef macrumors G4

    lordofthereef

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    #23
    I was thinking on an even more basic level. Logic dictates that at some point foxconn will hit a peak too regardless of what they make. Every comapny does. With everything.
     
  24. AxiomaticRubric macrumors regular

    AxiomaticRubric

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    #24
    No suprise. I'm still using an iPhone 6+ and it works fine, with the exception of choppy performance on a few games. Other than that I have literally zero reasons to upgrade.
     
  25. mcfrazieriv macrumors 6502

    mcfrazieriv

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    #25
    Aren't these guys also spending butt loads of money on automation?
     

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