Foxconn cautious for Q3 as smartphone sales slow

Foxconn cautious for Q3 as smartphone sales slow

by Yimou Lee and Sarah Wu

TAIPEI (Reuters) – Foxconn, one of Apple’s main contractors, delivered a cautious outlook for the current quarter on Wednesday as demand for smartphones slowed after a boom fueled by the COVID-19 pandemic. .

The Taiwanese group also published results for the quarter ended in June above expectations.

Foxconn’s comments echo those of other Asian tech groups that have warned of declining sales of smartphones, TVs and electronic gadgets, as runaway inflation and growing fears of recession curb consumer spending. households.

Foxconn has been largely protected so far as the popularity of iPhones, which it assembles, has endured among its loyal and relatively affluent customer base.

The company estimated on Wednesday that rising inflation would have a limited impact on demand for mid-range and high-end smartphones over the rest of the year.

But analysts say Apple should expect weaker demand in China, where the economy is still reeling from tight restrictions imposed with each COVID-19 outbreak.

Foxconn said so-called smart consumer electronics, including smartphones – its main business driver – posted “significant growth” in the second quarter and accounted for half of its overall revenue. The company nevertheless expects stable revenue growth for the quarter ending in September.

Net profit and revenue for the April-June quarter both rose 12%, and the company’s chairman of the board, Liu Young-way, said on a conference call that these figures testified to the company’s “resilience” in the face of supply chain issues.

“Our customers, and we, are all large global technology companies, and have relatively strong supply chain management capabilities. This advantage allows us to minimize the impact of any material shortages,” said Liu Youngway.

The group reaffirmed that it expects its overall turnover to increase this year, instead of remaining stable as previously expected, but did not provide a numerical outlook.

(Report Yimou Lee and Sarah Wu; written by Sayantani Ghosh; French version Elena Vardon, edited by Jean-Stéphane Brosse)

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