HMD’s manufacturing partner FIH Mobile, a company owned by Foxconn, issued more details about the profit warning published in November 2017, including the revenue and profits for 2017.
Preliminary, FIH Mobile reports that the company doubled their revenue in 2017 compared to 2016. The revenue for the last year exceeds $12 billion, while the 2016 revenue was $6.2 billion. The net loss for 2017 is expected to be around half a billion dollars, compared to $136 million profit in 2016.
FIH Mobile blames the loss on lower gross margins, impairment of investments and because of investments related to new business partnerships.
HMD Global isn’t the only manufacturer for whom FIH Mobile manufacturers devices. FIH in one occasion stated that they manufacture (a portion of) devices for three of top five Chinese manufacturers. Growth of sales of Nokia phones, combined with the growth of Chinese manufacturers surely helped FIH double their revenue in just a year. We will see if the manufacturer will manage to solve the profitability issue this year, because if not, price hikes for Nokia devices could be expected.
FIH Mobile’s full report will be published in early April this year.