Foxconn shares fall following $226m net loss

Foxconn International Holdings (FIH), the world's largest contract producer of smartphones, has seen shares fall 3.5 per cent after its worst-ever first-half net loss.

The manufacturer posted a $226m loss for the January to June period, marking a significant deterioration in performance since the same time last year, when it recorded losses of $17.65m.

FIH makes smartphones for clients including Nokia, Motorola and Sony Ericsson, all of which are  struggling to compete against the two strongest mobile device producers in the market, Apple and Samsung.

FIH's parent company, Foxconn Technology, helps assemble the iPhone and iPad, some of the most popular mobile devices available, with the latter dominating the tablet market. FIH, however, doesn't play any part in assembling Apple devices.

The company has blamed its worst-ever net loss on "sluggish" orders from key customers such as Nokia and the state of the global economy.

"Looking forward, challenging economic conditions around the world may continue to cast uncertainties in our business environment. The management team remains cautious over the future handset market conditions in 2012," said an an earnings report from FIH.

"Our key focus going ahead will be to do our best in controlling costs. We have a series of measures in place and one of them is to increase automation in certain parts of our production line," a spokesman added.

The much-hyped release of the Samsung Galaxy S III earlier this year could share part of the blame for Foxconn's huge net loss. It's possible consumers chose not to purchase Nokia, Motorola or Sony Ericsson devices readily available during the first half of 2012, instead waiting for the May release of the Galaxy S III.