Foxconn sales declined 19% during the first quarter of 2013, and “disappointing” demand for Apple’s iPhone is getting the blame, Reuters reports. Between January and March, the company’s sales totaled NT$808.97 billion ($26.96 billion), down from NT$988.24 billion ($32.99 billion) in the fourth quarter of 2012, and NT$1 trillion ($33.38 billion) a year ago.
“A quarterly decline was expected, but not a yearly decline,” said KGI Securities analyst Ming-chi Kuo. “This shows that Hon Hai’s revenue depends too much on Apple, and iPhone orders corrected more than expected.”
Kuo expects Foxconn to post flat sales in the second quarter of 2013, and he expects the company’s net profit to come under pressure during the first half of this year.
Foxconn gets 60-70% of its revenue from Apple, assembling the Cupertino company’s hugely popular Macs and iOS devices. But some analysts feel Apple’s sales are beginning to disappoint, with revenue forecasts missed in the December quarter, thanks to “disappointing holiday sales.”
Some feel Apple needs to launch a low-cost iPhone to counter the increasing threat from rivals like Samsung, who offer a range of devices catered to different sections of the market. Others believe that the company just needs something completely new, like the Apple television or the iWatch.
Apple is expected to launch the iPhone 5S this summer, according to recent reports, with new iPads scheduled for this fall. Some reports have also claimed the iWatch may launch before the end of 2013, and that a low-cost iPhone may debut as well.