Foxconn says that the coronavirus impact on smartphone demand is set to be ‘enormous,’ and recovery will take ‘a very long time.’
Company chairman Liu Young-way made the comments as Foxconn reported first-quarter profits down 90% year-on-year as a result of production shutdowns in China at the height of the coronavirus crisis there …
Reuters reports.
Liu said that the outlook for the second half of the year was unclear. He expects growth from the computing division, as lockdowns create demand for devices geared to both working from home and home entertainment, but says that smartphone demand is going to take a huge hit.
“Hon Hai will stabilize in the second quarter,” Foxconn said in a statement, adding that all of its main factories in China have now resumed normal operations.
Net profit for January-March slumped 90% to T$2.1 billion ($70.3 million) from a year earlier – the lowest level since the first quarter of 2000 and well short a Refinitiv consensus estimate of T$8.88 billion. Revenue declined 12%.
For the second-quarter, the company expects revenue will show double-digit growth from January-March although it will still likely mark a single-digit decline from the same period a year earlier.
Different market intelligence firms had different estimates for the fall in smartphone sales in Q1, but all put it in double-digits. Within China, sales rebounded in April, but the global coronavirus impact remains extremely uncertain. Reflecting this, Apple declined to offer any guidance for the current quarter.
“For consumer electronic products, because everyone is staying at home, naturally it affects consumers’ purchasing power and such power might take a very long time to recover,” he said.
