August 11, 2022: -Apple Inc supplier Foxconn provided a cautious outlook for the current quarter after posting outcomes that exceeded expectations, which cited delaying the smartphone market following a pandemic-fuelled boom.

The comments from the Taiwanese company, the biggest contract electronics maker, echo those from other Asian tech companies that have warned of a drop in smartphones, TVs, and gadgets as increasing inflation and deepening the tensions of a recession crimp consumer spending.

China’s Lenovo Group documents its smallest revenue growth in nine quarters as the biggest PC maker noticed device sales ease after being driven by the pandemic and COVID-19 lockdowns reaching it at home.

Foxconn, best known for putting the iPhones, has been primarily shielded so far as the popularity of iPhones is enduring among its loyal and relatively affluent customer base, and it said that rising inflation would have a limited impact on demand for mid-to-high-end smartphones in the rest of the year.

But analysts warned that Apple should be bracing for softer demand in China, where the effects of strict COVID-19 lockdowns still affect the economy.

Foxconn stated that the innovative consumer electronics, including smartphones – its primary business driver posted “huge growth” in the coming quarter and accounted for the overall revenue. But it forecasts flat revenue growth for that business in the quarter that will finish in September.

Both net earnings and revenue for the April-June quarter increased 12%, and the Chairman of the company Liu Young-way told a post-earnings call that the numbers show its “resilience” amid supply chain problems.

Like different global manufacturers, Foxconn, formally known as Hon Hai Precision Industry Co Ltd, has managed an extreme shortage of chips that hurt production.

“Our customers and ourselves are all large global technology companies and have fairly strong supply chain management abilities. This advantage allows us to minimize the impact of materials shortages,” Liu said.

Foxconn predicts revenues for cloud and networking products to be strong in the third quarter. It reaffirmed its stance from the previous month that overall revenue this year will grow, rather than the previous guidance of remaining flat.

Foxconn has expanded into electric vehicles and semiconductors recently; advertising deals with U.S. startup Fisker Inc and Indian conglomerate Vedanta Ltd.

It even develops new vehicles with working U.S. EV maker Lordstown Motors Corp.