Taiwan-based manufacturer Hon Hai, better known to the public by its brand name Foxconn, has watched year-over-year sales fall by 19 percent following Q1 2013.
Revenue at Hon Hai reached T$808.97 billion, down from T$1 trillion in Q1 2012 and T$988.34 billion in Q4 2013.
According to reports the drop in revenue is being blamed on lower demand for the Apple iPhone line of devices.
According to KGI Securities’ Ming-chi Kuo:
“A quarterly decline was expected, but not a yearly decline. This shows that Hon Hai’s revenue depends too much on Apple and iPhone orders corrected more than expected.”
The analyst report suggests that Foxconn revenue will remain flat throughout Q2, 2013.
Flat Apple sales spell trouble for Hon Hai and Foxconn. The company current draws nearly 60 to 70 percent of all its revenue from Apple contracts, mostly for production of APple iPhone and iPad devices.
Apple’s declining iPhone and tablet sales are being blamed on a combination of factors that including a post-holiday slump and tougher competition from an increasingly large number of Google Android phone competitors.
Apple and Foxconn are likely to experience further sales declines in late April when the Samsung Galaxy S IV hits the market. Also receiving excellent reviews is the HTC One, the company’s newest flagship smartphone. The HTC First will also release with its eye squarely on heavy-use Facebook users.
The tech giant could also be experiencing weakened sales because of its failure to offer major innovations from the Apple iPhone 4S to the iPhone 5.
The iPhone 6 and a potential lower-end iPhone smartphone could help push up production at Foxconn. With a July release date expected for both devices that production could begin shortly and continue through Q3 and Q4 2012.
Do you think Apple is losing ground in the smartphone and tablet sectors because of a lack of innovation or because of increased competition?
[Image via Wired]