As published by China Business, Apple and Foxconn may have had a staggering setback in the production of the iPhone since a huge number of iPhones were returned to Foxconn because they did not meet Apple’s standards.
Details of the incident have not been released, but the report suggests that somewhere between five and eight million iPhone units were returned because of the “appearance of substandard or dysfunctional problems.”
The model rejected was not specified, but whether the report refers to the iPhone 5 or the iPhone 4S, both of which are currently on sale, Apple could end up facing several weeks of setbacks to its supply chain. In case the devices in question are units of the forthcoming next-gen model, the company could be forced to delay its next smartphone.
As for Foxconn, this could mean a large hit to the bottom line: up to $1.6 billion if every aspect of the returned handsets were having malfunction problems. However, it is more likely these existing handsets can be refurbished for parts.
What makes the news believable is the fact that Apple’s products just become increasingly difficult to make. Apple went as far as to admit that the iPhone 5 was “the most difficult device” it was ever tasked with assembling. However, since late 2012, there has been no indication of any iPhone 5 production problems from Foxconn.
According to some rumors, the problems could be related to Apple’s next-generation handset, frequently referred to as an “iPhone 5S.” Ming-Chi Kuo stated earlier this month might face production problems due to technical challenges, namely the anticipated inclusion of a fingerprint sensor below the home button. Furthermore, an additional hold-up for the next iPhone, according to Kuo, could be the development of iOS 7, Apple’s anticipated next-generation mobile operating system.
After knowing that the iPhone 5 is extremely difficult to make, it can be said that the iPhone 5S is likely to be even more difficult to produce than the iPhone 5. This could only mean more trouble for Foxconn.
According to the Wall Street Journal, Foxconn has hired around 10,000 employees as it gears up to kickstart production of the forthcoming smartphone, in order to meet ‘seasonal demand’ from clients.
However, it appears that Hon Hai Group denied that Apple Inc had returned 5 million iPhones produced at Hon Hai’s plants in China because of flaws in their appearance or malfunctions. In addition, Hon Hai spokesman Simon Hsing denied the figures mentioned in the report, though he said that the company will look into management and product yield rate issues mentioned in the report.