iPhone assembler Foxconn has reported a 31% drop in its Q2 net profit, a hit being attributed to the recent decline in iPhone sales. The company reported net profits of NT$17.7B ($566) against analyst expectations of NT$23.9B, reports the WSJ.

There was some good news for the company, however, as its acquisition of Sharp got the government approval necessary to make the deal fully official.

The impact on suppliers of reduced iPhone demand was first seen back in May, when it was reported that Foxconn, Pegatron, Sharp, Japan Display and Sony had all seen their fortunes falling. The impact on one supplier in particular has worsened dramatically … 

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The Financial Times reported earlier this week that Japan Display – which generates more than half its revenues from Apple – is seeking financial support from a government-backed fund. CEO Mitsuru Homma said that the company had ‘encountered a temporary funding shortage’ after reporting a quarterly net loss of ¥11.8bn ($115m).

While Homma said that the funding shortage had been resolved, the FT reports that analysts are skeptical due to the investment capital required to continue to attract orders from Apple.

Japan Display needs to make heavy investments in new technologies to compete against South Korean rivals Samsung Display and LG Display. The company is aiming to start mass production of OLED panels in 2018, with Apple likely to adopt OLED screens for its new iPhones.

Japan Display had hoped to merge with Sharp before Foxconn acquired the business.

Some perspective on the decline in iPhone sales can be found in my two opinion pieces.

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