Foxconn, Apple’s largest manufacturer, has reported a decline in its Q4 2023 revenues for all of its businesses, including the iPhone. The company expects this trend to continue into Q1 2024 due to a slowdown in demand.
This disappointing news follows a series of shrinking profits for Foxconn throughout 2023, including a significant 56% drop in Q1. The company had hoped to see a rebound with the launch of the iPhone 15; however, its latest quarterly report shows a continued decline in sales.
According to Reuters, Foxconn’s earnings report reveals that Q4 2023 was flatish, with an overall year-on-year revenue decrease of 5.4% to $59.54 billion. While this figure was better than expected, the most concerning aspect was the sharp drop in December 2023’s revenue, down 26.9% compared to the previous year, amounting to $14.84 billion.
Foxconn representatives have also expressed their anticipation of decreased demand for its businesses, including the iPhone, in Q1 2024. However, the company has not provided specific figures. It is worth noting that first-quarter sales are typically lower than fourth-quarter sales since Apple releases new iPhones in September, just ahead of the holiday buying season.
Market analysts have further downgraded Apple due to the declining iPhone demand. Piper Sandler, for instance, recently downgraded the company, attributing its decision to economic concerns and the rising prices of RAM and Flash chips. Analyst Harsh Kumar predicts a challenging first half of 2024 for Apple.
Similarly, Barclays investment bank is pessimistic about the second half of 2024, stating its belief, albeit without clear evidence, that the iPhone 16 range will lack compelling new features.
As Foxconn grapples with declining revenues and Apple faces market challenges, both companies will need to develop strategies to adapt to changing consumer needs and regain growth momentum.
In the competitive world of smartphones, market conditions can shift rapidly, making it essential for manufacturers like Foxconn and companies like Apple to continuously innovate and satisfy consumer demands. The coming months will undoubtedly be crucial for these industry leaders as they navigate the evolving landscape and seek to regain their footing in the market.
