(Bloomberg) -- Hon Hai Precision Industry Co. warned of its fourth consecutive decline in quarterly sales after a 5.4% slide in the last three months of 2023 suggested consumer electronics demand remains muted.
The Taiwanese firm, also known as Foxconn, reported a steep 27% drop in December sales to NT$460.1 billion ($14.8 billion), concluding a NT$1.85 trillion quarter. It now sees sales falling in the current period as well, adding to concern about the latest iPhone generation's momentum heading into the new year.
As Apple Inc.'s foremost iPhone assembly partner, Foxconn provides insight into broad consumer demand for personal tech. Apple's iPhone 15 went on sale in September, to a mixed early reaction in key markets: the US saw it kickstart an upgrade cycle from earlier iterations while sales in China declined.
China will again be a focal point of challenges for the iPhone this year, as the ban on the handset and other Apple hardware at Chinese agencies and state-backed companies has widened and local tech giant Huawei Technologies Co. is reclaiming market share with its premium Mate 60 series.
Read more: China Rattles Foreign Firms With New Arrests, Foxconn Probe
Foxconn has also been the subject of a regulatory investigation in China, which shook investors and the confidence of foreign companies operating in the country late last year. The Taiwanese device builder is facing a growing challenge from Chinese rival Luxshare Precision Industry Co., which is set to expand its iPhone production capacity.
iPhone sales volume is likely to grow 2% this year, short of the overall mobile market growth of 5%, according to Counterpoint Research associate director Liz Lee. Huawei's smartphone sales, on the other hand, are expected to grow 37%. This week, Barclays and Piper Sandler cut theirs ratings for Apple due to soft demand for its latest iPhone.
Foxconn is reliant on Apple for the bulk of its revenue. Its cumulative sales in 2023 were NT$6.16 trillion, down 7%.
Read more: Apple Hit With Second Downgrade This Week on iPhone Worries
(Updates with additional details from Hon Hai statement)
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