Foxconn Inc, the company assembling the iPhone X for Apple, has this week posted a 39 percent year-over-year decrease in net profit. And if the industry speculations are to be believed, this profit tumble is due to the difficult-to-assemble iPhone X, which remains in limited supply. Also Read - Apple Podcasts Subscriptions and channels go live in 170 countries starting todayAlso Read - Apple TV+ free trial will now be available for 3 months instead of a year: What to do?
The downward profits of Foxconn are noted from the September quarter, when production of the iPhone X was full fledged, with still two months for it to start shipping. As per WSJ, the company s profits fell to 21 billion New Taiwan dollars, or about $695.5 million. Analysts had expected a decline but their anticipation was at about NT$35.6 billion, whereas the company faced a much greater decline. Also Read - Apple Beats Studio Buds launched: AirPods for Android devices
As is reported by FT, Thompson Wu, an analyst at Credit Suisse, says that these results are mostly driven by lower margins after Foxconn was hit by weeks of idle capacity as teething issues with the iPhone X, related to its Face ID technology, were resolved. ALSO READ: Apple, Foxconn to meet as iPhone X faces production issues: Report
While the company was able to shift its focus on Apple s iPhone 8 series for the meanwhile, which went on sale in September, the move was not enough to offset the incurred wage cost for the iPhone X workforce , Wu told FT. We knew there was going to be idle capacity, we just didn t know it was going to be to this size. 23. ALSO READ: Apple to ship 2-3 million units of iPhone X for November 3 launch: Ming-Chi Kuo
However, fortunately for Foxconn the downward curve may not stay this way for long. In the fourth quarter, the iPhone X production issues are not expected to have a significant impact on the company. Reportedly, Yuanta Securities forecasts manufacturers will ship 28 million iPhone Xs in the fourth quarter, ramping up to 32 million in the first quarter of 2018. ALSO READ: Foxconn to expand in Tamil Nadu at Rs 300 crore outlay: Minister