Apple Inc. (NASDAQ: AAPL) could be headed for a weak holiday season - its top supplier Foxconn Technology Co. Ltd.'s (OTC: FXCOF) parent company Hon Hai has predicted an overall decline in iPhone shipments in 2023.
What Happened: Foxconn parent Hon Hai now expects the overall iPhone demand in 2023 to decline as the global smartphone industry witnesses a slowdown.
In its June quarter earnings, Hon Hai estimated that its overall sales would decline in 2023 after it initially forecast flat revenue. An expected contraction drives the worsening outlook in most of its core businesses, including smartphone manufacturing.
"iPhone shipments from Foxconn in the fourth quarter and next year's first quarter will be lower than they were a year earlier, due to weak demand from multiple key markets such as the US, China and Japan," said Counterpoint Research analyst Ivan Lam, as quoted by Bloomberg.
Why Is It Important: Apple has not been insulated from a decline in smartphone demand - the iPhone maker is expected to see a 2% decline in iPhone revenue in September. This would make it the largest revenue fall in the September quarter since 2016.
Most of the decline in Apple's topline in the September quarter is expected to come from the Americas.
On its part, Apple has reportedly asked its suppliers to manufacture 85 million units of the iPhone 15 series this year, keeping its demand steady from the iPhone 14 series last year.
Even if there is a demand slowdown, Apple might offset some of this impact thanks to an expected $100 increase in iPhone 15 Pro and iPhone 15 Pro Max prices.