Rumor: Apple returned batch of 8 million defective iPhones to Foxconn

Posted:
in iPhone edited January 2014
A batch of as many as 8 million iPhone units were reportedly not up to Apple's standards after being assembled by Foxconn, and were subsequently returned to the company.

The alleged manufacturing issues were detailed on Monday by The Register, which cited a report first published by China Business. It's alleged that an anonymous Foxconn employee revealed that the number of iPhones affected ranges from 5 million to 8 million.

iPhones
Apple's current iPhone lineup.


The issues are apparently "due to appearance of substandard or dysfunctional problems." Foxconn is allegedly preparing to take a hit of up to $1.6 billion for the returned products.

The report failed to indicate exactly which iPhone model was affected by the apparent issues. When it launched late last year, the iPhone 5 saw a number of production issues as Foxconn ramped up its assembly.

In fact, the company 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.

The Register also speculated that the rumored production problems could be related to Apple's next-generation handset, frequently referred to as an "iPhone 5S." Well-connected analyst Ming-Chi Kuo indicated earlier this month that Apple's "iPhone 5S" is likely to face production problems due to technical challenges, namely the anticipated inclusion of a fingerprint sensor below the home button.

"Apple has to work out how to prevent interference from the black and white coating material under the cover glass," he said. "Apple is the first to attempt this function and technology, and time is needed to find the right coating material, which will likely affect iPhone 5S shipments."
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Comments

  • Reply 1 of 57
    mdriftmeyermdriftmeyer Posts: 7,264member
    In short, here is where all the false propaganda from Apple sales slowing down originates: from faulty manufactured products returned and replaced.
  • Reply 2 of 57
    gatorguygatorguy Posts: 20,618member
    Hmmm.

    So according to one lone and anonymous staffer who reportedly said something to China Business and got it picked up by the Register this becomes a story? I guess China Business is one of the more reliable sources then.
  • Reply 3 of 57
    steven n.steven n. Posts: 1,118member
    I am amazed media give these anonymous mouth pieces a voice. In the original report, the returned units was simply 5 million. Then it ballooned to 8 million. In otherwords, the source (if there really was one) simply made things up.
  • Reply 4 of 57


    It's highly unlikely that Apple and Foxconn would let 5 million defective units be produced before catching a defect that would require the device to be scrapped or reworked.  I'm sure there are Apple QA people there at the factory as well as company inspectors.  I could see a batch of a few thousand.  But 5 million would have to be produced over time with a complete failure of both companies to check properly.

  • Reply 5 of 57
    rogifanrogifan Posts: 10,669member
    It's The Register. Probably one of the more anti-Apple sites out there. These days with Apple anything gets reported even if the source is highly questionable. Heck we're getting more TIm Cook must go rumors from none other than hedge fund guy Doug Kass. :rolleyes:

    http://tech.fortune.cnn.com/2013/04/22/apple-cook-whisper-campaign/?source=yahoo_quote
  • Reply 6 of 57
    fithianfithian Posts: 82member
    I heard it was 23 million units returned (from an anonymous source).
  • Reply 7 of 57
    chabigchabig Posts: 624member


    How would Apple even catch defective units? The rumor says they were returned, meaning they first shipped. Apple doesn't open every iPhone box to inspect the phone before selling it. This sounds very suspicious.

  • Reply 8 of 57
    jax44jax44 Posts: 78member
    I like mustard and mayonnaise with my baloney!.
  • Reply 9 of 57
    zoffdinozoffdino Posts: 192member


    5 million iPhones is 1 to 1.5 week of production. What Apple QA has done in this whole time? Just slept? The media is picking up every story about Apple, no matter and dubious and treats that as fact. One person said something to another person at a local newspaper and it gets picked up by a tabloid and treated as fact? Can someone post the original article as appeared in the Chinese newspaper? I bet someone here would be able to do a human translation for us. I think this is a dirty trick played by Samsung to discredit Apple. They had been caught before in the Digitimes (http://apple-investor.com/2013/04/digitimes-is-a-samsung-shill/)


     


    “When you need to sell a lie, you get the press to sell it for you” – Lester Siegel (from the movie Argo).

  • Reply 10 of 57
    solipsismxsolipsismx Posts: 19,566member
    It's unlikely but it's possible, especially if the defect isn't with Foxconn's assembly but with a component that was shipped to Foxconn for inclusion in the final product. Even something as simple as a faulty camera component that only shows it's not functioning properly under certain usage conditions.
  • Reply 11 of 57

    Quote:

    Originally Posted by SolipsismX View Post



    It's unlikely but it's possible, especially if the defect isn't with Foxconn's assembly but with a component that was shipped to Foxconn for inclusion in the final product. Even something as simple as a faulty camera component that only shows it's not functioning properly under certain usage conditions.




    As mentioned above, though, how would you know they are faulty? Did Apple have 5-8 million returned units?


     


    [Oh, never mind... I misread your comment.]

  • Reply 12 of 57
    solipsismxsolipsismx Posts: 19,566member

    As mentioned above, though, how would you know they are faulty? Did Apple have 5-8 million returned units?

    I don't understand your query. How is anything deemed faulty? It's discovered, then verified. You analyze why it's faulty. If it's HW related you determine which hardware it is and narrow down to certain to defective batches.

    For example, Foxconn employees get a batch of defective displays. They simply don't work at all. When Foxconn does its tests the unit doesn't work. One every now and then isn't just a defective units but this starts happening over and over. They let it be known (perhaps a computerized system has alerted someone already since x-many bad units went through. They investigate and find its the displays. They figure out the batch numbers for problematic component and make sure no other devices are made with them. They might even slow down production to do additional tests before ramping up again.
  • Reply 13 of 57
    jpvnjpvn Posts: 40member
    Wait, didn't a story from cnbc a couple of weeks ago say that a employe of foxxcon told them they where doing nothing? That they had no orders??? now they are getting 5m phones back
  • Reply 14 of 57
    newbeenewbee Posts: 2,055member

    Quote:

    Originally Posted by SolipsismX View Post



    It's unlikely but it's possible, especially if the defect isn't with Foxconn's assembly but with a component that was shipped to Foxconn for inclusion in the final product. Even something as simple as a faulty camera component that only shows it's not functioning properly under certain usage conditions.


    Anything is "possible". It's also "possible" that, seeing how earnings are about to be announced,  a lowlife scumbag money manger presiding over a very large share of Apple (64% ins. owned) is spreading FUD ...AGAIN .... to drive down share price to allow him/her to gain a quick and easy profit. The great thing about "anonymous" sources is that everybody seems to have one. That's my bet.

  • Reply 15 of 57

    Quote:

    Originally Posted by jpvn View Post



    Wait, didn't a story from cnbc a couple of weeks ago say that a employe of foxxcon told them they where doing nothing? That they had no orders??? now they are getting 5m phones back


     


    Well, that is one way to give them something to do...


     


    image

  • Reply 16 of 57
    solipsismxsolipsismx Posts: 19,566member
    newbee wrote: »
    Anything is "possible". It's also "possible" that, seeing how earnings are about to be announced,  a lowlife scumbag money manger presiding over a very large share of Apple (64% ins. owned) is spreading FUD ...AGAIN .... to drive down share price to allow him/her to gain a quick and easy profit. The great thing about "anonymous" sources is that everybody seems to have one. That's my bet.

    I agree that your scenario sounds more plausible.


    PS: Not everything is possible. The impossible, for instance. :p
  • Reply 17 of 57
    newbeenewbee Posts: 2,055member

    Quote:

    Originally Posted by SolipsismX View Post





    I agree that your scenario sounds more plausible.





    PS: Not everything is possible. The impossible, for instance. image


    Give it time. It was once "impossible" to visit the moon, now it's possible. image

  • Reply 18 of 57
    dasanman69dasanman69 Posts: 12,980member
    jax44 wrote: »
    I like mustard and mayonnaise with my baloney!.

    Yes but does your baloney have a first and second name?
  • Reply 19 of 57
    charlitunacharlituna Posts: 7,215member
    If it was a whole batch then it was likely caught at the factory during per shipment QA testing, not the implication they went to stores or customers.

    My guess is that this number, which keeps changing as the story is posted and reported and it likely way lower than than even the 5 mil cited in one version, has to do with accumulated returns being charged back to Foxconn. It's likely in their contract with Apple that they have to 'pay' for failures due to assembly issues. Such as all the parts were fine but they didn't put in the glue to hold the battery in place. Or enough glue to properly attach the glass in a display. Or connect the wifi chip etc. and the number could be over several months from DOA returns at launch, QA testing before shipment, service returns with no signs of cx tampering etc.

    But the spin is that they shipped, it was a huge batch and now folks will paint that iPhone sales should use been 8-10 million more, there could be more out there (witch hunt time) and so on. Like the LG story this will bring the stock down.
  • Reply 20 of 57
    solipsismxsolipsismx Posts: 19,566member
    newbee wrote: »
    Give it time. It was once "impossible" to visit the moon, now it's possible. ;)

    It's like the old riddle what is always coming but never gets here? Tomorrow. The impossible isn't possible, but once something previously deemed impossible becomes possible it's no longer impossible.
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