Foxconn Technology Group, the world’s largest contract manufacturer of consumer electronics, posted 50 per cent year-on-year growth in December revenue mainly from iPhone X sales, the company said in a filing to the Taiwan stock exchange on Thursday.
The growth in monthly revenue to NT$675 billion (US$30.47 billion) was attributed mainly to the fact that shipments of iPhone X were delayed to November 2017, and because the price of the new model was 20 per cent higher than iPhone 8 Plus.
Boosted by the strong performance in December, Foxconn saw its annual revenue increased 8 per cent year on year to NT$4.7 trillion in 2017, reversing the revenue decline of 2.8 per cent in 2016.
However, the strong revenue growth in December failed to lift its share price because investors are concerned that demand for iPhone X will be below expectations.
Foxconn’s financial results are scrutinised for hints to Apple’s health as the Taiwanese contract manufacturer is a key assembler of the US company’s products and the sole manufacturer of the iPhone X.
Taiwan’s Economic Daily reported, citing unnamed sources, that over Christmas Apple slashed its iPhone X sales forecast to 30 million units for the first quarter from a previous estimate of 50 million.
A report from brokerage firm JL Warren Capital said iPhone X shipments would drop to 25 million units in the first quarter of 2018, citing reduced orders at some Apple suppliers.
However, some analysts still see significant iPhone X shipments in the first quarter of this year, with Jeffries forecasting 40 million units. A report from Morgan Stanley also said the iPhone X adoption rate in China is faster than that for iPhone 8 or 8 Plus.
Founded in 1974, Foxconn is the world’s largest electronics manufacturer, assembling computers for Dell, as well as iPhones and iPads for Apple. For many years the company based its factories in low-wage countries such as China, assembling electronic products that were eventually distributed and sold in the US and Europe. However, more recently Foxconn has been investing in high end manufacturing using robotics and artificial intelligence, allowing it to consider possible factory locations in the US.
In August last year, Terry Gou, founder of the Taiwanese company, said he was planning a multibillion dollar investment in the US state of Michigan, a week after announcing a US$10 billion planned investment in Wisconsin. In December, Foxconn Technology announced cooperation with AI scientist Andrew Ng to introduce artificial intelligence and machine learning in its factories. Ng is former chief scientist at China’s Baidu and was also leader of the Google Brain deep-learning project.
Additional reporting by Bloomberg