IPhone production issues hit Foxconn profits

Cornelia Mascio
Novembre 15, 2017

The Taiwan-based company, known as Hon Hai Precision Industry Co. lists Apple as its largest customer.

While the 10th anniversary version of iPhone has seen parts suppliers struggle with specifications for new features such as facial recognition and edge-to-edge display, red-hot demand for the product, which went on sale this month, is expected to lead to a relatively rapid recovery for Foxconn.

The decline in profit from the corresponding quarter a year ago was the biggest since the global financial crisis in 2008. Hon Hai's fourth-quarter results should improve on sales of the iPhone X, which appears to be strong so far, analysts say.

Some analysts also attributed the profit slide to an appreciation in the value of the yuan as well as to labour idled due to a later-than-usual launch for Apple's new smartphone.

Foxconn earnings in the third quarter largely relied on iPhone X output as it shared production of the iPhone 8 with other assemblers like Pegatron.

Demand for iPhone X is undeniably strong and it appears numerous supply issues have also been resolved, although iPhone X is still backordered up to 4 weeks for new Apple Store online orders.

Shares in Foxconn fell as much as 2.8 percent in Wednesday trade to their lowest level since late September, underperforming the broader Taiwan market which was down 0.5 percent. Apple itself is expected to set an all-time revenue record in the holiday quarter, predicted to sell more than 80 million iPhones.

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