Apple's Foxconn, Japan Display Providers Report Disappointing Results

Foxconn and Japan Display released disappointing financial results this week, as the effects of slowing iPhone sales are reflected in Apple's supply chain.

Foxconn sales fell 17.7% in the first quarter of 2019 to $ 637.26 million.

Japan Display said Wednesday that mobile screen sales, which account for 73.3% of its total sales, were down 17.2% from one year to the next. Japan Display has imputed declining sales to customers switching to OLED screens of flagship phones, instead of using traditional LCDs. He also highlighted "the slowdown in the smartphone market in China and around the world" and the "extended life cycle of smartphones." Japan Display is asking 1,000 employees to retire earlier by the end of the second quarter.

The global slowdown in phone sales has been attributed to rising phone prices. Premium phones now cost more than $ 1,000, for example, and customers keep their devices longer. Toni Sacconaghi, of Bernstein, said in February that iPhone owners are now hooked on the phone for three or four years. The research firm IDC said in February that 2018 was the "worst year ever" for smartphone sales, with shipments falling by 4.1%.

Apple iPhones will probably not be much cheaper in the future. Earlier this week, J.P Morgan said that Apple should increase the cost of iPhones by 14% to offset the next rate cycle, unless they absorb the costs themselves.

In an effort to offset the slowdown in sales, Apple has put more focus on its service business with a new Apple News + premium subscription offering, a new Apple TV Channels platform that has been launched. this week and that will give him a bigger share of the subscription revenues. services such as HBO and Showtime, as well as an original Apple TV + content library to be rolled out this fall.