Investors struggle to gauge iPhone demand as Foxconn revenue growth slows

Foxconn plans to invest about $700m in a new plant in India to ramp up production there, as more manufacturers shift from China to reduce fall-out from growing Washington-Beijing tensions

Investors are struggling to gauge how the popularity of iPhones and mobile devices will hold up this year.

Foxconn increased revenue by les than 4% last quarter, underscoring how fears of a recession are crimping demand for iPhones and other consumer electronics.

The world’s largest maker of Apple's devices reported revenue of $48 billion for the usually slower March quarter. That’s down steeply even from the previous three months, when a covid outbreak prompted protests at its main Zhengzhou facility in central China, disrupting iPhone production for weeks. 

That complex, known as “iPhone City” for being the largest global production site for Apple’s marquee device, resumed normal operations only in January. 

Investors are struggling to gauge how the popularity of iPhones and mobile devices will hold up this year. Foxconn also said that it expects a decrease in business in the second quarter on a year-over-year and quarterly basis.

Xiaomi's smartphone shipments dived 26% in the fourth quarter after consumers worldwide put off spending on items such as electronics during a period of soaring inflation.

Manufacturers such as Foxconn — which also makes iPads and gadgets for many of the world’s biggest brands — are now re-examining an electronics supply chain centered on China. 

The Taiwanese firm plans to invest about $700m in a new plant in India to ramp up production there, as more manufacturers shift from China to reduce fall-out from growing Washington-Beijing tensions. 

Meanwhile, Terry Gou, the billionaire founder of Foxconn has said  he would seek the presidential nomination for Taiwan's main opposition party, the Kuomintang (KMT), for a second time.

Mr Gou stepped down as Foxconn chief in 2019 and made a presidential bid that year, but dropped out after he failed to win the nomination for the KMT, which traditionally favours close ties with China.

Speaking to reporters at a hotel next to Taiwan's main international airport at Taoyuan on his return from a week-long trip to the US, Mr Gou said the only way to avoid war with China was to reduce Sino-US tensions and get Taiwan's ruling Democratic Progressive Party (DPP) out of office.

"Peace is not taken for granted, and people need to make the correct choice," added Mr Gou, who did not take questions.

He made his announcement the same day Taiwan President Tsai Ing-wen is due to meet US House Speaker Kevin McCarthy in Los Angeles, a meeting China has threatened to respond to with unspecified retaliation.

The KMT is in the process of choosing its candidate for the next presidential election, in January 2024, with Hou Yu-ih, mayor of New Taipei City, broadly considered the current favourite.

The run-up to the election is taking place at a time of increased tensions between Taipei and Beijing, as China stages regular military exercises near the island to assert its sovereignty claims.

The KMT denies being pro-Beijing, though it supports maintaining good relations with China. The DPP champions Taiwan's separate identity from China, but the government it leads has repeatedly offered talks with China that have been rebuffed. 

Bloomberg and Reuters