Home Manufacturing Technology iPhone production issues hit Foxconn profits

iPhone production issues hit Foxconn profits

Taiwan company Foxconn Technology has recorded a 39% drop in profit for the quarter ending September compared to the corresponding period a year ago, a fall that appears to be attributable in part to production difficulties with the iPhone.

The company, which is known as Hon Hai Precision Industry and is an electronics contract manufacturer, had a net profit of 21 billion New Taiwan dollars (about US$695.5 million) in the latest quarter, much lower than the NT$35.6 billion that analysts had estimated, The Wall Street Journal reported.

The newspaper has earlier reported that production problems around the 10th anniversary release, the iPhone X, include a shortage of parts for the facial recognition system. There have also been manufacturing issues over the OLED screens.

The decline in profit from the corresponding quarter a year ago was the biggest since the global financial crisis in 2008.

Hon Hai pulled in revenue of NT$1.1 trillion, about the same as the quarter which ended in September 2016. The company did not provide any commentary or outlook on its results. 

Apple is yet to put out any sales figures for the iPhone X which was released on 3 November. But the long lines at stores around the world and shipping delays of five to six weeks indicate that there is insufficient stock to meet demand.

During Apple's quarterly results announcement this month, chief executive Tim Cook did not offer any indication as to when supplies of the three iPhone models released this year would catch up with demand.

The WSJ quoted Cook as saying at the time, "If we would have shipped all at once, that would have been our preferred scenario, obviously, but we didn’t have that choice.”

Pegatron, the company that assembles the iPhone 8, announced a net profit which was down by 32.4% for the quarter ending September.

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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.