Foxconn says that the coronavirus impact on smartphone demand is set to be ‘enormous,’ and recovery will take ‘a very long time.’

Company chairman Liu Young-way made the comments as Foxconn reported first-quarter profits down 90% year-on-year as a result of production shutdowns in China at the height of the coronavirus crisis there …

Reuters reports.

Foxconn’s first-quarter profit plunged to its lowest in two decades, all but wiped out, after the coronavirus pandemic forced the Taiwanese firm to suspend manufacturing operations in China and knocked demand from customers including Apple […]

“Hon Hai will stabilize in the second quarter,” Foxconn said in a statement, adding that all of its main factories in China have now resumed normal operations.

Net profit for January-March slumped 90% to T$2.1 billion ($70.3 million) from a year earlier – the lowest level since the first quarter of 2000 and well short a Refinitiv consensus estimate of T$8.88 billion. Revenue declined 12%.

For the second-quarter, the company expects revenue will show double-digit growth from January-March although it will still likely mark a single-digit decline from the same period a year earlier.

Liu said that the outlook for the second half of the year was unclear. He expects growth from the computing division, as lockdowns create demand for devices geared to both working from home and home entertainment, but says that smartphone demand is going to take a huge hit.

The division is forecast to post a 15% yearly decline in sales as the virus is set to have “an enormous” impact on demand. In the first quarter, the division accounted for 42% of revenue.

“For consumer electronic products, because everyone is staying at home, naturally it affects consumers’ purchasing power and such power might take a very long time to recover,” he said.

Different market intelligence firms had different estimates for the fall in smartphone sales in Q1, but all put it in double-digits. Within China, sales rebounded in April, but the global coronavirus impact remains extremely uncertain. Reflecting this, Apple declined to offer any guidance for the current quarter.

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