Major Apple supplier Foxconn took one for the team

“It looks like Foxconn Technology Group is taking one for the team,” Tim Culpan writes for Bloomberg. “In an earnings report filed overnight in Taiwan, data show a rise in inventory at a time when revenue was slowing, and sales at its major client, Apple Inc., dropped.”

“This situation looks familiar. Inventory figures at Apple’s primary chipmaker Taiwan Semiconductor Manufacturing Co. were also high at the end of 2018, up 40 percent from a year earlier,” Culpan writes. “That revelation came soon after Apple cut its own outlook for the period, citing weaker demand. Impressively, the iPhone maker managed its inventory so well that the figure climbed a mere 12.8 percent at the end of December from a year earlier – one of the slowest clips in recent quarters, and in the face of falling sales.”

“My conclusion in January was that, to avoid holding inventory, Apple was pushing it back onto suppliers… these Hon Hai figures are further evidence of Apple’s inventory strategy,” Culpan writes. “If Hon Hai’s figures are anything to go by, the first quarter is likely to be one of austerity, in the hope that taking one for Team Apple will be rewarded with a rebound later. Now all we need is for consumers to go back out and start buying gadgets again.”

Read more in the full article here.

MacDailyNews Take: Regarding the need “for consumers to go back out and start buying gadgets again,” some perspective by way of facts: Apple sold 217.72 million iPhones in 2018, up from 216.76 million in 2017, and up from 211.88 million in 2016.


  1. If Apple had done ONE thing… and that is release the XS Max at the same price as the XS… and then prices the XS $100 lower… or even $50 lower… the XS would have received OODles more upgrades. Combine that with a $699 iPhone XR price and man… there’d still be lineups.

    With sales… PERCEPTION is everything. Pricing the XS Max at the $999 price would have been Apple bucking the industry trend and actually LOWERing prices for their customers… in the wake of a HUGE jump last year for the X.

    Apple would be buying perception of affordable luxury… at the expense of a little short-term profit. Apple used to do this really well… lower the prices year-over-year for their products… as the tech matured.

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