Foxconn's Profits Slide 31% as iPhone Sales Continue to Drop

[Zirel]

As we all know, Foxconn only produces for Apple... /s

And Apple only produces in Foxconn, Pegatron doesn't exist unless you want to make a scandal. /s

 

[9081094]

There has never been a business in the history of the world that has been able to consistently maintain the growth rate of a tumor. It's impossible.

View attachment 644543

I'm very curious how that picture will look like when whole 2016 is included. It would also be interesting to put it next to Xiaomi, Huawei, Samsung etc.

 

[2457282]

I have a 6 and I still don't see a reason to upgrade. And people who have the 5 or 5S might be more interested in the 5SE.

Even the biggest Apple Fanboys don't seem to be able to make a case for the new phone. If you are, please do!

I have the 5c (mother-in-law), 5s (daughter), 6 (wife) 6s (me). Every year we slide the phones down and I get a new one. I have read all the rumors too. THEY ARE RUMORS. I will wait until the announcement in a few weeks, but really don't see anything that would keep me from continuing the trend. My daughter is ready for the 6 and my mother in law with the 5c really does need to get upgraded even to the 5s. And although there are some hardware features that Android phones have that look interesting, they are not compelling enough for me to abandon all the apps and integration that I have invested in.

Here is the question beyond changing the shape of the phone (what does that do for me - I like the current shape), or improving the hardware components (camera, CPU, GPU, Memory) what new features can we cram into a phone. Wireless charging would be very cool. Looks like we already get the second camera. So what else, OLED? - yeah that would be nice. What else? None of these are deal breakers. More important to me is the OS and the Apps. To me the level of integration and stability in Apple's ecosystem is still way ahead of Android.

So I guess if you do not want to upgrade that is okay. I think the americans are waking up to the fact that these phones cost a lot of money (previously they got them for $100 bucks subsidized by the phone company through higher plan rates). Maybe the 1 or two year cycle is over for phones in the US.

So my case is that in my situation I have a four year rotation through the family which allows for a new phone every year.

 

[macfacts]

It helps long term investors make money. Who gives a damn about short-term investors or day traders looking to flip stocks as fast as possible to line their pockets?

Is 1 year long enough? Compare stock price today and one year ago.

 

[ccsicecoke]

Who wants to pay $700 to buy a phone with ugly crappy UI that pretty much resemble their android or microsoft counterpart that cost only a half? I bet once they put iOS 6 on all their new phones it will be a different story

 

[EricTheHalfBee]

It's not only iPhones what Foxconn glues together for Apple. It's iPads, Macs, MacBooks etc. as well.

Macs were down 11%. iPads were down 7%.

Sorry, you're still wrong.

 

[captain cadet]

I wonder if the slump isn't just about a "lack of innovation" but maybe more, or at least partly, due to market saturation. So many people have iPhone's now and other smartphones that eventually sales would slow down at some point.

This whole "doom and gloom" sentiment seems silly to me at this point. The companies are still making money hand over fist here and they're not even close to going under or anything like that.

I was thinking the other day, apart from waterproof phones, larger battery and better camera what more features do you want in a phone? Yes you can say that you want more power but the iPhone 5S still is good enough that most people who have it still use it. Yes there can be subtle changes but its like the car - They all get you from A to B, all have a radio, windows and seats.
Yes you can add better radio for a infotainment system, bigger windows or nicer seats, but to many people why spend £35000 when they could get the same tool, not as fancy for £9,000? Yes its not as fancy but it does the job and at the end of the day smartphones are now a tool, not a statement so if consumers could save £150 by having a older generation or have another year on a sim only contract, why not? What can the iPhone 5S not do that the iPhone 6S do? 3D touch and apple pay really and faster.

Apple should probably focus on other areas such as the iPad and Apple Watch as once people go into the phase of "that does the same job as the new one) thats it. Until something mind boggling happens nothing will change! Look at the s7, haven't sold like hot cakes and that has a better camera and waterproofness as such and same with the 6S.

 

[Savor]

Sometimes winning isn't about playing "hero ball" like Kobe Bryant used to do to get all the credit. Sometimes every play at bat won't be a home run. Apple shouldn't be catering to only rich people. Tim Cook and his team need to think of a way of getting more people onto this Apple ecosystem? And that's usually based on price.

I personally hope Apple does fall from grace. I really, really want to see it happen. I hope they dip below 10% and have Huawei and Oppo surpass them in two years. Not because I am a Fandroid or despise iTunes or can easily emulate the iOS homescreen, but I want to see how well Apple reacts with adversary. Having your back against the wall is a better motivator than being some complacent fat cat. Apple have been LAZY for years and got away with it because they're Apple with the same blind arrogance as their demographic.

So yes, I hope to see their ship continue to sink faster than Titanic. What goes up, must come down. A free fall like how quickly BlackBerry and Nokia fell within a couple of years. You learn more from mistakes than your successes, Apple. Now learn and then react. Motivate to innovate. Samsung has got them beat (globally) and I don't see if Apple stays at #2 for very long with Chinese OEMs like Huawei and Oppo on the rise.

Apple's heyday - 1997 or 2001 through 2015.

Best days could very well be behind them soon. Every empire has crumbled. Los Angeles Lakers are a joke franchise now when just six years ago they were NBA champions. I hope Apple's complacency and blind arrogance finally catches up to them. Karma.

 

[lionsy]

The prices guys, the prices.

This is the begin of the end if Apple can't compete with Nexus cheaper models. I mean, why a new buyer should pay 600+$ instead of half the price for a 5X? And the 5X is not a bad smartphone at all. It's super good indeed!
I don't want to start realizing that there's no reality in the shareholders eyes. In this world Android is becoming more tough to beat, the iPhone cannot stand only on his name and on Steve's heritage. Ok Swift, ok good design, ok Apple, wow amazing! YOLO: but the troubles are emerging now more than ever.

Because just like any market, including the phone market, which has always had budget high end phones, there are always high price high end phones and there are always people buying them. budget and and high price markets do not crossover in personal electronics, I'm not about to go out and buy a £90 android phone, because I don't want one and I can afford to buy an iPhone on my budget and it works both ways.

 

[Jbusick7944]

I'm glad Macrumors continues to type "the Cupertino-based company" every time Apple is referenced.

 

[thisisnotmyname]

I'm not sure what the mix is of Foxxcon's customer base but they are a large contract manufacturer handling more than just Apple. That said, if Apple is a significant percentage of the business that's a risk for them (or anyone). No one tells a large customer to go away but you need to be aware if a single customer makes up more than 10% of your revenue that any change in their business (or them simply walking away) is going to have a serious impact on your own business and do your best to build up other aspects of the business to diversify.

 

[thewebb]

Think about how many people upgraded to the 6 and 6+. Most people will wait two years to upgrade again. I think they will do just fine this year.

 

[smaffei]

After getting my son one a couple of months ago, I'm thinking of replacing my iPhone 6 with an SE. Fits much better in my hand and I care nothing about force touch or 3D Touch or whathaveyou.

Exactly! I had to replace a family member's broken screen phone and went with an SE instead of waiting for iPhone 7. They just bought Bose wired headphones (with mic) for iOS off of Amazon a week before for $100. Why render brand new headphones obsolete with a phone upgrade that isn't that significant?

 

[S.B.G]

I was thinking the other day, apart from waterproof phones, larger battery and better camera what more features do you want in a phone? Yes you can say that you want more power but the iPhone 5S still is good enough that most people who have it still use it. Yes there can be subtle changes but its like the car - They all get you from A to B, all have a radio, windows and seats.
Yes you can add better radio for a infotainment system, bigger windows or nicer seats, but to many people why spend £35000 when they could get the same tool, not as fancy for £9,000? Yes its not as fancy but it does the job and at the end of the day smartphones are now a tool, not a statement so if consumers could save £150 by having a older generation or have another year on a sim only contract, why not? What can the iPhone 5S not do that the iPhone 6S do? 3D touch and apple pay really and faster.

Apple should probably focus on other areas such as the iPad and Apple Watch as once people go into the phase of "that does the same job as the new one) thats it. Until something mind boggling happens nothing will change! Look at the s7, haven't sold like hot cakes and that has a better camera and waterproofness as such and same with the 6S.

That describes how I feel about my 6s and the iPhone in general right now. I like it a lot and it serves me well. But incremental updates as of late aren't as exciting as they once were and, at this point, I'm questioning whether or not I will upgrade to the 2017 iPhone when my 2 years are up with the 6s. Maybe I will, maybe I won't; it all depends on the condition of the 6s and whether or not the 2017 iPhone will debut some amazing, must have, feature or not.

 

[nt5672]

It's not only iPhones what Foxconn glues together for Apple. It's iPads, Macs, MacBooks etc. as well.

All of which are further behind in innovation than the iPhone.

 

[flexiboy1912]

After reading all the rumors about the new iPhone I really don't even know how thy are going to advertise it.

No headphone jack is a huge no go for many people I have talked to, myself included.

And the rumors also point to most other things staying virtually the same.
The 6S is already blazing fast so a faster processor is unlikely to convince anyone to go out and upgrade their phone either.

wht is their strategy for the new phone? Only people with yearly free upgrade plans and expiring contracts?

What am I missing?

Totally agree , I won't be updating. Think the gravy train for Apple is starting to dry up.

 

[thisisnotmyname]

Read the full article, revenue is only down 5%. Another indicator this isn't just a fall in Apple orders, more likely there are other factors increasing costs or putting downward pressure on margins to result in a 31% profit hit on 5% revenue decrease.

 

[flexiboy1912]

What if they don't include your fancy wireless AirPods and bundle the cheap Lightning headphones that most people are expecting?

I don't want Apples EarPods thank you. I want to carry on using my expensive Shure without the need of a crappy adapter sticking out of my lightening ports.

 

[Karma*Police]

iPhone sales were down YoY so I'm sure that contributed but Foxconn's CEO said that the mobile business is steady and that the laptop/PC market was suffering.

That's a pretty important thing to mention in an "article" but why conduct research when you can cheaply regurgitate lazy journalism, largely based on analysts and bloggers jumping to conclusions?

Journalism is dead.

 

[smaffei]

The phone hasn't even been announced yet lmao you do realizes not every single feature leaks right?

Most of them do leak ahead of time these days. When was the last time you saw a Cook keynote and you were truly surprised by a phone feature that wasn't leaked? The iPhone 7 is going to be about as banal as rumored. Sorry.

Gone are the days Jobs moving a hula hoop around an iBook to show it's wireless. Now, that was a surprise.

 

[nt5672]

Sometimes winning isn't about playing "hero ball" like Kobe Bryant used to do to get all the credit. Sometimes every play at bat won't be a home run. Apple shouldn't be catering to only rich people. Tim Cook and his team need to think of a way of getting more people onto this Apple ecosystem? And that's usually based on price.

I personally hope Apple does fall from grace. I really, really want to see it happen. . . . .

The Apple ecosystem is part of the problem. That worked well for iPhone because of the cellular network, but for AppleTV, Macs, etc. it is crap. We don't need a new Microsoft where Apple stuff only works with Apple stuff. We need standard hardware that is open, performs at the top of its class, is usable by non-technical folks and nerds both, and reasonably priced based on its reliability. We don't need Apple telling us what we run on our Apple TV, iMac, MacBook, etc. We don't need more Apple stores. We don't need to be forced to use iCould because Apple is removing all of the local storage (which they have not yet, but it is probably coming.)

Apple used to lead us to the future, now it feels like they are forcing us to the future and that is not something that I and lot of people I know feel good about.

 

[OllyW]

I don't want Apples EarPods thank you. I want to carry on using my expensive Shure without the need of a crappy adapter sticking out of my lightening ports.

I think the dropping the 3.5mm headphone socket rumour is pretty much guaranteed now so you'll probably have to settle for an adaptor, new headphones or a different phone.

 

[LovingTeddy]

First off, the smartphone industry is saturated as is. Anyone who ever wanted an iPhone already owns one or multiple ones. Then sold them off. The luster of owning an iPhone died out years ago. People are hanging onto their phones longer because the specs and each mobile platform is mature enough to use longer than say five years ago.

Secondly, flagships generate the most profits. Not midrangers or budget phones. If Apple wants a race to the bottom, they would need to license iOS to other manufacturers the way Microsoft did to Windows and make a lucrative cut from each OEM using iOS. Apple will not sabotage their profits just by slashing prices on their flagships. Apple goes for profits, not volume sales like what Google shoots for with Android to generate more web traffic and sell more ads.

I don't need to keep regurgitating what I already said with Apple and their future. Same ol', same ol'. Nobody stays on top forever. If it is truly that serious, okay. *shrugs* Every company goes through it from IBM to Sony. Apple went through it worse in the mid-90's. Only continents keeping iPhone afloat is North America and Europe. But Asia has 60% of the world population. You don't respect China, India, and Indonesia (#1, #2, #4 in population) enough for iPhone sales to grow considerably, expect consequences.

Apple should license iOS to other OEM's. This can drive hardware prices down for any non-Apple iOS devices. Now if the OEM changes the hardware configuration too much, tough luck on software updates. Real iPhones would then be treat like Google Nexus devices with the fastest updates. Apple can maintain selling their iPhones for higher profits while licensing iOS to other manufacturers would help saturate the Apple mobile platform in poorer but more populated countries .

At some point, all industries get saturated enough. But Apple needs other manufacturers to saturate iOS even more in countries like China, India, and Indonesia where price matters. BTW, if that happens to be iPhone Girl, at least someone has shown her loyalty working to assemble iPhones for us and being paid for very little. That's eight plus years of loyalty working under Foxconn. My loyalty dealing with all-Apple/all the time, burnt out three years ago.

First of all. The smartphone market is not saturated as is. It is the high end smartphone that is saturated. There are still more than half of world population still without smartphone. And you know where those population at? Developing nations. Apple cannot compete with midrang or low end smartphone in those area.

2. Apple will never license their OS. Apple wants control over its hardware and software. When other OEMs can make cheaper iOS devices, why would you buy from Apple? The end result is Apple will loss control over both hardware and its hardware sales.

3. Apple need some cheaper iPhone. iPhone SE is good start but still not cheap enough. Somewhere I read, 97% of Indian population uses Android. Even 399 Dollar iPhone SE is too expensive for most Indian people, let alone Aferica and South Asia. Even in developed nation, iPhone is still expensive plus strong US dollar really does not help Apple. iPhone 6 costs more than 800 dollar after tax in Canada. iPhone 6S is even more expensive. Yes. Galaxy cost similar, but Samsung has cheaper phone to offer where Apple does not.

4. Apple's service revenue is going up. Apple should open up its services to other platform. Like what Apple did with Apple Music. Apple should put iMessage on Android. Take lesson from BlackBerry. Once dominate BBM became joke. Apple need do something before iMessage became other BBM. By then, making money from iMessage would be too late.

 

[TallManNY]

This is just a drop in profits. Profits fluctuate all the time.
But if Apple doesn't want another serious decline in iPhone's sold this year it has to lower its price. I'm using a $60 BLU R1 HD from Amazon and it is a fine smartphone running Android 6.0. For phone manufacturers that price must be terrifying. Phones like that are going to drive the really good Android phones down into the $300 price range. Apple is going to struggle to sell if its phones in 2017 if the price starts at double the latest flagship-level Android phones. And forget about it if the price is more than 10x a phone that does email and runs all the social media apps perfectly fine.

 

[smaffei]

I think the dropping the 3.5mm headphone socket rumour is pretty much guaranteed now so you'll probably have to settle for an adaptor, new headphones or a different phone.

Well, it's probably going to be Lightning headphones in the box and a Lightning→3.5mm adaptor as an overly priced accessory purchase. And, as in typical Apple fashion, the adaptor will be in short supply throughout the end of the year because they underestimated demand. Yeah. Sign me up for that.