Apple supplier Foxconn expects low demand for consumer electronics in 2023
Apple supplier Foxconn expects low demand for smart consumer electronics this year, as the manufacturer just reported a 10% fall in fourth-quarter profit from a year earlier.
"We maintain a relatively conservative view towards the smart consumer electronics and think they might decline slightly," Foxconn Chairman Liu Young-way said on the earnings call, reported Reuters. During the October-December quarter, the manufacturer's net profit fell to $1.31 billion from $1.44 billion.
This dip in the last quarter comes after Foxconn faced protests after a COVID-19 outbreak in November last year. With factories closed or working at low capacity, these events affected the manufacturer's profit as well as Apple's, which also had a revenue fall in its usual best quarter.
Foxconn's view of the year also aligns with Apple's expectation, as it forecasted its revenue to fall for a second quarter in a row. That said, the Cupertino firm still expects iPhone sales to improve after production had returned to normal in China.
Interestingly enough, although Apple is expected to enter a new business this year with its Mixed Reality headset, Bloomberg's Mark Gurman reported that this is going to be a mild year for the Cupertino firm, as it doesn't expect important Apple Watch, iPad, or AirPods upgrades or launches.
While Apple will likely improve iPhone sales with the iPhone 15 later this year, the Mac line is also not getting important changes, such as the ones that happened in 2020 and 2021. On the other hand, Foxconn forecasts significant growth in other areas, such as computing, cloud and networking, and component products.
While quarter revenue falls, both companies are also trying to expand their business outside China. Apple wants to produce more products in India and Vietnam so it doesn't have to deal with the same issue it had last year when the biggest iPhone factory stayed closed for weeks.
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Apple supplier Foxconn expects low demand for consumer electronics in 2023 originally appeared on BGR.com on Wed, 15 Mar 2023 at 10:09:05 EDT. Please see our terms for use of feeds.