Apple has reportedly shipped back as many as 8 million iPhones to Foxconn's assembling units due to issues in its manufacturing standards.
An anonymous Foxconn staffer tells China Business Apple returned at least five million iPhones, and maybe as many as eight million, "due to appearance of substandard or dysfunctional problems," The Register reports.
"With a cost to manufacture of $200 a piece, Foxconn is apparently preparing to take a hit of up to $1.6 billion to cover the cost of making replacement handsets. China Business suggests the cost of making new iPhones represents further bad news, not a reason for Foxconn's recently-revealed financial woes," the report states.
The report, however, does not specify which model was affected by the apparent issues, although it should be noted the iPhone 5 had a number of production issues when Foxconn ramped up its assembly late last year. In fact, the Taiwanese contract manufacturer Hon Hai, popularly known as Foxconn, has admitted that iPhone 5 was the most difficult device it ever assembled.
"If it's the current iPhone 5, or the still-on-sale 4S, the impact of eight million phones failing to appear would punch a two-or-three-week hole in Apple's supply chain, an assertion we make on the basis that the company says it sold 47.8m handsets in its last quarter. That quarter included Christmas, so we can safely assume the January-March quarter sees a little less handset-selling action," the report speculates.
However, The Register also indicates that the rumored production problems could be related to Apple's next-generation handset, often referred to as an iPhone 5S.
