Foxconn’s profits seemed to have slipped quite a bit to $700 million las quarter, down 39 percent year-over-year decline from $1.09 billion it was pulling during last year’s third quarter time period. The Taiwanese assembler has continued to see iPhone X production problems, a major reason why the company’s profits have dipped this much. The company relies heavily on order from Apple as it accounts for more than half of its business.
First reported by Bloomberg, Foxconn was unable to assemble as many iPhone X phones as it needed to stay profitable, mostly due to the lack of parts. Foxconn did not have enough suppliers to make OLED displays. In addition, many suppliers struggled to manufacture the Face ID component due to the complexity. Earlier this month, we saw defective units from fault Face ID parts spark further production issues for the iPhone X, which is Apple would only be able to ship around 20 million units, half of what the company planned.
Making the iPhone X isn’t easy for Foxconn due to the complexity of parts required to assemble the phone. Making the iPhone X caused Foxconn’s operating expenses rise above 16 percent in Q3. It doesn’t help the fact that iPhone 8 and iPhone 8 Plus haven’t sold very well. Apple has already started to cut iPhone 8 unit orders by as much as sixty percent so they can make room for iPhone X orders.
Foxconn may have seen a dip in profits, but there’s one thing going for the company: demand for the iPhone X. The smartphone is selling like hot cakes and the demand for the smartphone won’t lose momentum anytime soon, especially not with he holidays around the corner. According to 9to5Mac, iPhone X is backordered up to four weeks. Even though Foxconn’s operating costs have risen and profits squeezed further down, the company still has a chance to make up for the losses by producing iPhone X as fast as possible and as many as possible.