Apple supplier Foxconn says it is ‘cautiously positive’ on Q4, adding to debate over iPhone 14 demand

Foxconn, a major supplier of Apple, warned Tuesday it is “cautiously positive” on the outlook for the fourth quarter after record September sales.

The Taiwanese company’s comments add further fuel to the debate over demand for iPhones in the coming months, given its outsized role in assembling Apple’s flagship device.

Foxconn said September revenue totaled 822.3 billion new Taiwan dollars ($25.9 billion), up 40.4% year-on-year and 83.2% higher than August, a monthly sales record for the company.

That massive revenue growth was driven by a “new product launch and smooth mass production” as well as strong performance of its smart consumer electronics products division, which includes its key smartphone business. Foxconn does not name its customers, including Apple, in its earnings releases.

Neil Shah, a partner at Counterpoint Research, said Foxconn’s record revenue came on the back of “storming demand” for the higher priced iPhone 14 Pro and Pro Max models, which were launched last month.

While Foxconn maintained its full-year outlook, the company said Tuesday it is “cautiously positive” on the outlook for the fourth quarter.

“The dynamics of inflation, the pandemic, and the supply chain still need to be closely monitored,” Foxconn said.

Inflation continues to remain high and central banks are raising interest rates, adding to fears of a global recession which could hurt consumer demand.

Foxconn’s comments come amid a debate over the strength of Apple’s business against this difficult economic backdrop.

Last week, Bank of America analysts delivered a rare downgrade to Apple’s stock and cut its price target on “weaker consumer demand” for the iPhone 14. Apple shares fell sharply soon after.

Apple shares fell around 12% in September and are down nearly 20% so far this year.

Bloomberg also reported last week that Apple had told its suppliers to scrap plans for an increase to iPhone 14 production.

However, not all analysts agree with Bank of America. Rosenblatt Securities on Thursday upgraded shares of Apple to a buy from neutral, citing the firm’s own research survey suggesting iPhone 14 demand remains strong.