Hon Hai posts highest-ever October sales

Taipei, Taiwan-based iPhone assembler Hon Hai Precision Industry Co., the world's largest contract electronics maker, posted the highest ever consolidate sales for October on the back of solid demand for computing devices.

In a statement released Friday, Hon Hai, also known as Foxconn in the global market, generated NT$589.73 (US$19.15 billion) in consolidated sales for October, up 0.82 percent from a month earlier and also up 21.48 percent from a year earlier.

The October consolidate sales was the second-highest ever monthly figure in Hon Hai's history, company data showed.

In the first 10 months of this year, Hon Hai posted NT$4.76 trillion in consolidated sales, up 17.7 percent from the NT$3.46 trillion posted over the same period last year, the data indicated.

In October, Hon Hai's computing device division made the strongest showing in terms of revenue, ahead of its communication device operations and consumer electronics division, the company said.

Looking ahead, market analysts said Hon Hai is expected to continue to benefit from the current peak season effects in the fourth quarter, but its sales growth momentum will depend on how well the latest three iPhone models -- the iPhone XS, the iPhone XS Max and the iPhone XR -- which Apple unveiled in September, will be sold.

Apple accounts for about 40 percent of Hon Hai, which is one of the most important suppliers to the U.S. consumer electronics maker.

The market had previously anticipated many consumers in the global market had put their smartphone replacement plans on hold, waiting for the more affordable iPhone XR, instead of snatching the more expensive iPhone XS or iPhone XS Max.

In Taiwan, the 6.1-inch LCD iPhone XR carries a price tag starting from NT$26,900, compared with the 6.5-inch OLED iPhone XS Max's NT$39,900 and the 5.8-inch OLED iPhone XS's NT$35,900.

However, Appleinsider, a foreign tech website, cited Rosenblatt Securities's analyst Jun Zhang as saying that iPhone XR sales have been lower than expected. Due to the weaker-than-expected demand, some media reports said it was possible for Apple to cut back orders to its suppliers which are in the iPhone XR supply chain in the fourth quarter.

A Japanese brokerage cited a survey as saying that the orders placed by Apple to its iPhone XR supply chain is expected to be cut by 20-30 percent, which indicated shipments of iPhone XR will be dragged down by 40-50 percent during the period of November 2018 and January 2019.

As a result, Apple's suppliers such as Hon Hai could feel the pinch in its bottom line resulting from the impact in the fourth quarter of this year and even in the first half of next year, the brokerage said.

The market has estimated that Hon Hai makes up more than 50 percent of orders placed by Apple to assemble the iPhone XR, while the Taiwanese firm has received 80-90 percent of the iPhone XS and iPhone XS Mas assembly orders.

Source: Focus Taiwan News Channel