Sluggish smartphone demand causes Foxconn’s April sales to drop by 12%.

Foxconn, the world's largest contract electronics maker and a major assembler of iPhones, has reported a 12% drop in sales for April 2023.

The decline in revenue is primarily due to weakness in smart consumer electronics, which include smartphones and are the company’s main business driver. Foxconn’s revenue for the month reached T$429.2 billion ($14 billion), in line with the company’s own expectations.

According to Foxconn, the decline in sales is attributed to the “traditional slow season” that smart consumer electronics products typically experience in April. Business in the second quarter is also expected to decline due to a high base last year and the seasonal off-peak period, as the company transitions between old and new products.

Foxconn’s weak performance in the first half of the year is not uncommon for Taiwan tech manufacturers, as major electronics vendors like Apple tend to launch new products near the year-end holiday season. However, Apple’s recent quarterly results, which beat expectations thanks to better-than-expected iPhone sales and inroads in India and other newer markets, may indicate a possible rebound in the smart consumer electronics industry.

Despite the decline in sales, Foxconn has predicted that revenue for the full year will be flat, with weak demand for consumer electronics offset by growth in computing, cloud, networking, and component products.

As of May 2023, Foxconn’s shares have risen 5.1% year-to-date, lagging behind the broader Taiwan market, which is up 10.5%. The company will report first quarter earnings on May 11 and provide an update on its outlook for the full year.

It remains to be seen how Foxconn’s weak sales will affect the broader technology industry, especially given the ongoing global semiconductor shortage and supply chain disruptions. Nevertheless, Foxconn’s position as a major assembler of Apple products and a major player in the smart consumer electronics industry ensures that it will continue to be closely watched by investors and industry experts alike.

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