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Apple supplier Foxconn records third consecutive fall in yearly profit

Iphone Factory China
Iphone Factory China (Image credit: Apple)

What you need to know

  • Apple supplier Foxconn has reported its third consecutive fall in profits in three years.
  • A waning smartphone industry meant profits fell by 10% to around $3.8 billion.
  • Looking forward, the current economic climate and global pandemic could have a "major impact" on the second half of the year.

Apple's main iPhone supplier Foxconn has recorded its third consecutive fall in yearly profit in as many years as the global smartphone market continues to wane.

According to Nikkei Asian Review:

MARCH 30, 2020 21:31 JST

TAIPEI -- Key iPhone supplier Foxconn on Monday reported a third consecutive year of lower profits as the smartphone industry continues to slow.Net income at Foxconn, formally traded as Hon Hai Precision Industry, fell 10% to 115.3 billion New Taiwan dollars ($3.81 billion) in 2019, while operating income dipped nearly 16% on the year. The company's gross margin was 5.9%, lower than the 6.27% in 2018 and well below its goal of 10% by 2025.Net profit for the key iPhone assembler climbed NT$47.8 billion in the final quarter of 2019, supported by the launch of the new iPhone 11 range in late September. However that represents a decline of more than 20% from the same period of 2018, due to a delayed shipment of the previous year's iPhone that resulted in higher comparisons, market analysts said.

According to the report, the branch of Foxconn that serves its Android customers recorded a net lot of 2019, however, the loss was significantly smaller than 2018, where it lost $857 million.

Looking ahead, the report notes that Foxconn has endured a tough start to 2020, and it has previously estimated that its revenue would fall by about 15% year-on-year in the first quarter.

The report notes that the global tech supply chain is "braced for uncertainty as worldwide demand for electronics shows significant signs of weakening."

Stephen Warwick
Stephen Warwick

Stephen Warwick has written about Apple for five years at iMore and previously elsewhere. He covers all of iMore's latest breaking news regarding all of Apple's products and services, both hardware and software. Stephen has interviewed industry experts in a range of fields including finance, litigation, security, and more. He also specializes in curating and reviewing audio hardware and has experience beyond journalism in sound engineering, production, and design.

Before becoming a writer Stephen studied Ancient History at University and also worked at Apple for more than two years. Stephen is also a host on the iMore show, a weekly podcast recorded live that discusses the latest in breaking Apple news, as well as featuring fun trivia about all things Apple.