Roger Fingas
Apple's primary assembly partner, Hon Hai — better known as Foxconn — saw its revenues drop approximately 20 percent in December, on top of missing full-year sales predictions from analysts.
The company reported December revenue of $12.3 billion, coincidentally about a 20 percent drop both month-to-month and year-over-year, according to Reuters. Annual revenues were up 6.42 percent, but that figure was below an averaged analyst consensus calling for 7 percent.
December numbers were as expected, Hon Hai said in an official statement.
A variety of Apple suppliers, such as Catcher and TPK, have either seen lower-than-expected December figures or had to adjust their 2016 spending. Along with Foxconn's data, trends appear to back a Nikkei claim that Apple is cutting its iPhone 6s/6s Plus production by about 30 percent.
The slower production has been attributed to an "inventory adjustment" rather than weak demand, giving vendors a chance to clear out stockpiled units. Demand for iPhones also typically tapers off after the Christmas season, remaining reasonably healthy until just a month or two before new models are announced — at which point some buyers may decide to wait.
William Gallagher
Christine McKee
AppleInsider Staff
Chip Loder
Malcolm Owen
80 Comments
That should be good for another 2-4% drop of AAPL today. /s
And the hits keep coming.
Get your pocketbooks ready to buy Apple shares at $80 in a few weeks.
I've no doubt the numbers we'll see in the next Apple quarterly will be great as usual. Retail sales were almost certainly impressive. If there's any softness expected in the following one, and perhaps there might be based on a bunch of recent bit and pieces, Tim Cook will surely mention it in their forward projections. Also pay attention to channel inventory numbers they'll offer after the quarterly. For the moment this is a non-story. Wait for Apple to comment after the next report.
Of course we don't know what any of this means because we don't know Apple's production cycles, channel inventory etc. The question I have is if the March quarter is going to be brutal would Apple have to pre-warn about that? Or would they only have to warn if they were going to significantly miss December estimates?