Remember how just a few months ago, Foxconn profits were slumping because — as the anti-Apple brigade hysterically shrieked — the iPhone 5 was a dud, and the iPhone’s meteoric rise in popularity was finally done?
Yeah, well, Foxconn just posted a 41 percent year-over-year increase in profit, driven by strong iPhone sales.
During the second fiscal quarter of 2013, Apple was expected to sell between 25-27 million iPhones. Instead, they smashed right through that prediction, selling 30 million… a success that passed itself on to Apple’s largest manufacturing partner, Foxconn. Apple earned $6.9 billion last quarter, while Foxconn earnest $566.7 million.
Not bad, and certainly those numbers aren’t indicative of a failing iPhone. However, there is a strong argument to be made (and the Wall Street Journal makes it) that Foxconn is too reliant on the iPhone. 40 percent of Foxconn’s revenue comes from Apple, and the company is so tied to Apple in the eyes of investors that as Apple’s share price has slipped, so has Foxconn’s.
In the past, Foxconn has said it is going to diversify its business to become less reliant on Apple. Honestly, while Apple remains the most profitable gadget maker on Earth, that may be a hard feat to accomplish, especially with the iPhone 5S and 5C on the horizon.
- Source Wall Street Journal