iPhone shields Foxconn

"Foxconn has been largely shielded from these demand problems so far as the popularity of iPhones has endured."

From Reuters' "Foxconn starts to feel sting of slowing smartphone sales" posted Wednesday:

Apple iPhone assembler Foxconn gave a cautious outlook for the current quarter after posting results that exceeded expectations, citing slowing smartphone demand after a pandemic-fuelled boom.

The comments from the Taiwanese company, the world's largest contract electronics maker, echo those from other Asian tech firms that have warned of a drop in sales of smartphones, TVs and gadgets as surging inflation and deepening concerns of a recession crimp consumer spending.

Foxconn has been largely shielded from these demand problems so far as the popularity of iPhones has endured among a loyal and relatively affluent customer base, and it said on Wednesday that rising inflation will only have a limited impact on mid- to high-end smartphone demand in the rest of the year.

My take: There's the smartphone industry, and then there's the iPhone industry.

4 Comments

  1. Laptop demand & production soared due to WFA but Macs gained market share in the process. Those massive tablet orders from public school systems are probably slowing though I’m certain many school teachers are gaining a real appreciation for the new iPads in particular. TVs seem to be about as large & hi-res as the eyes can interpret. I’ll wager a soon to be popular new XR headset is the next big retooling and assembly effort for Foxconn. Ssshh.
    I’m guessing Apple frequently uses excess Foxconn manufacturing capacity though it’s not easy or cheap to retool a line.
    The costs from various Chinese COVID-19 lockdowns had to be enormous for Foxconn. Still, in the meantime, Taiwanese firms, using huge government incentives, invested in new and existing semiconductor factories and assembly plants in Vietnam, Korea, India, Europe and the US, along with other regions. Construction of new Fabs in Taiwan seems to be moving at quite a brisk pace as well.
    Taipei is investing in the future while mainland China is mired in the past.
    So far it seems the Chinese cut off sand exports to Formosa and are declining fish and some other agricultural import, perhaps rice. I’m certain there’s more involved but the semiconductor imports are not being touched. There’s gold in them thar chips.

    3
    August 10, 2022
    • Steven Philips said:
      Fish?
      And chips? 🙂

      0
      August 10, 2022
  2. Fred Stein said:
    Yup. And…

    There’s the PC industry and then there’s the Mac industry.

    WSJ ran a front pager story about the downturn in the semi industry. They did NOT mention, Apple’s supplier TSMC.

    Apple’s customers have more discretionary income. They’re less impacted by inflation and less worried about recession.

    1
    August 10, 2022
  3. Michael Goldfeder said:
    This is probably similar to the sneaker industry. There’s Nike, then everyone else.

    0
    August 10, 2022

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