Apple Supplier Foxconn’s Profit Falls 2.5% In Second Quarter
The Company Relies On Apple To Make Half Of It's Revenue.
Foxconn Technology, the world’s largest contract electronics manufacturer and top iPhone assembler face another profit decline of 2.5 percent in Q2.
Foxconn is a Taiwan based company and was formerly known as Ho Hai precision Industry Company. According to the Foxconn net profit fell 2.5 percent in April-July to $541 million. It is the lowest three months profit since the year 2013.
Half of its revenue comes from by selling Apple iPhones. They have many factories in Chian where they assemble Apple's iPhones and other Apple products.
Because of the rise of Chines smartphone manufacturers, competition in the smartphone market is very high. Chinese companies are offering great features at much lower prices. Besides, people are using the phones longer. There are so many other reasons too, and as a result in the last quarter, iPhone sales declined 12 percent. It is the first time since 2013.
US-China trade is making things worse. Recently President Trump increases tariffs on Chinese goods and plans to put extra taxes on $300 Chinese products. That's why Foxconn and Apple may consider shifting some of their production outside China. Foxconn may move some of the parts of their Apple production line to India and Vietnam.
“Foxconn has 25% of its total production capacity outside China and production sites in 16 countries,” Liu said. “If Apple has any supply chain diversification plans outside China, we have sufficient capacity to help it cope with its need for the U.S. market.”