Hon Hai Posts Disappointing Q1 Earnings Due to Weaker iPhone Demand
April 10, 2013 9:17 AM
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Hon Hai reported a 19 percent sales decline for Q1 2013 compared to Q1 2012
Hon Hai Precision Industry Co. saw an unexpected yearly decline in the first quarter of 2013 thanks to shrinking demand for Apple's iPhone. Hon Hai reported a 19 percent sales decline for Q1 2013 compared to Q1 2012. While analysts were expecting quarterly decline from Q4 2012, they didn't see the yearly decline coming.
Hon Hai posted sales earnings of T$808.87 billion ($26.96 billion USD) for the quarter ended March 2013. This was a drop from T$988.34 billion in Q4 2012 and a further decline from T$1 trillion in Q1 2012.
Hon Hai, which collects about 60 to 70 percent of its revenue from the iPhone and iPad, saw a decrease in sales due to low demand for the iPhone in particular.
Apple has hard a
hard time keeping up the momentum
of its products, and it shows in the company's shares. Shares have fallen from $702.10 in September to $426.98 as of today. Also, Apple's iPhone only represented about 19 percent of worldwide smartphone shipments in 2012 while all Android-powered smartphones accounted for about 70 percent.
Android will even beat Apple in the tablet sector
this year, according to a new report from IDC. IPad shipments are expected to make up 46 percent of the tablet market for 2013, down from 51 percent in 2012. Android-powered tablets are expected to increase their market share to 49 percent in 2013, up from 42 percent in 2012.
Samsung is a particularly strong competitor to Apple as far as Android-powered devices go. We even saw a bit of fear in Apple as Phil Schiller (Apple's senior vice president of worldwide marketing)
talked trash about Android
on the eve of the Samsung Galaxy S IV release.
Samsung is even racing Apple to make a wearable device this year -- much like
a smart watch
-- and has plans to trump
Apple's new spaceship campus
with a more impressive headquarters in the U.S.
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RE: Hon hai who cares
4/10/2013 2:39:09 PM
There are widespread shortages for every highly anticipated product. It just meant there are more demand than supply. For an extremely widespread high demand product like the iphone, there's no chance that there's enough of it at launch for several reasons.
1. They would launch earlier if they had that much inventory stocked
2. They can't take the chance of having a surplus. A shortage is better as there is no chance of losing money.
3. The high demand and low supply at launch guarantees their price and gives the impression of a "superior" product everyone wants.
4. The shortage itself is like free advertisements and creates more demand
5. They don't want all the hype just to have their products sit on shelves and kill its own image.
6. They can efficiently adjust production and channel inventory correctly since they know where the shortages are.
The job of a supply chain manager is efficiency. Having a surplus, especially in electronics, will hit the bottom line hard and fast.
His problem is that he is still working the supply chain instead of directing like a CEO. Where are the new products we're supposed to see. I get the feeling we're going to see a whole lot of the same thing.
"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997
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