Since its release late last year the iPhone 5 has proven to be a popular device, but now the demand for the handset is beginning to decrease after just six months. The company that is responsible for the manufacturing of the device is Foxconn and sue to the demand slowing down the company is experiencing a drop in revenue for the first quarter.Image may be NSFW.
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The drop in revenue that the Chinese manufacturer Foxconn is experiencing has been put down to the decline in demand for the iPhone 5 and according to PC World the company have registered a 19.2 per cent drop in revenue year on year. One of the company’s analyst believes that the decline may not only be down to the demand of the iPhone 5 declining but also the fact that the popularity of the device has not matched up to previous versions of the device. The part of Foxconn’s business that is responsible for the production of Apple’s devices is Hon Hai Precision who posted a £18 billion revenue however the net profit that was generated was actually up by 8.4 per cent year on year. The new iPad Mini has been more attractive to consumers over the more expensive and more profitable iPad which has also contributed to the decline.
Foxconn’s second quarter could also get worse according to an analyst. It was commented by Arther Lia that “”I also believe (Hon Hai’s) second quarter will be worse than the first quarter”. There is currently a lot of speculation surrounding the pending release of the new iPhone 5S and the iPhone 6 which has also contributed to the poor first quarter figures. We expect to see the iPhone 5S arrive this summer and the device will then be followed by the iPhone 6 at the start of 2014.The predicted poor performance that is expected in the second quarter is also down to the arrival of high profile devices such as the impressive Samsung Galaxy S4 and the new Google Nexus 5. The S4 is predicted to be this years best seller worldwide.
The iPhone 5 has not achieved the success that was hoped and this has contributed to a dramatic decline in Foxconn’s revenue. The company, however, are expecting this to turn around what the iPhone 5S is launched.
