Hon Hai Precision Industry Co., the world's largest contract electronics maker, reported a decline in sales in August compared to the previous month, which analysts said largely reflected a vacuum in newly launched smartphone models.

In a statement, iPhone assembler Hon Hai, better known as Foxconn internationally, said it posted consolidated sales of NT$400.05 billion (US$14.44 billion) in August, down 4.3 percent from a month earlier.

Of the new smartphone models expected to be launched in the coming months, consumers are especially anticipating the unveiling of the next generation iPhones, the iPhone 13, which will likely happen later this month, according to analysts.

The timing of Apple's new models often affect Hon Hai's sales number because Apple accounts for about 40 percent of the Taiwan-based manufacturers total sales.

Hon Hai's sales in August were also down 4.87 percent from August 2020, when the company registered its highest ever sales for the month at NT$420.55 billion.

Analysts said the year-on-year decline largely resulted from a relatively high base of comparison, set when the stay-at-home economy was soaring because of COVID-19 and pushed up demand for computers and cloud technology-based communications gadgets.

Compared with the previous month, the strongest performance in August was turned in by Hon Hai's cloud services division, followed by the smart consumer electronics division, the computer division, and the electronics component division, the company said.

Compared with August 2020, however, the smart consumer electronics division generated the strongest sales, ahead of the electronics component division, the cloud services division, and the computer division.

In the first eight months of this year, Hon Hai's consolidated sales rose 22.09 percent from a year earlier to NT$3.52 trillion, the company said.

At an investor conference held in mid-August, Hon Hai said its sales for the third quarter were expected to stay little changed from the second quarter but would rise 3-15 percent compared with the third quarter in 2020.

Starting from September, analysts said, Hon Hai is expected to benefit from solid demand for servers and other related components used in cloud services, which command a higher gross margin.

Hon Hai's gross margin -- the difference between its revenue and cost of goods sold -- could rise to 7 percent, from 5.92 percent recorded in the first half of this year, according to a market estimate.

In addition to Apple, Hon Hai's major clients include Amazon, Cisco, Dell, Facebook, Google, HP, Microsoft and Sony.

Source: Focus Taiwan News Channel