Details of just what went wrong are sketchy, as the source for this tale is an anonymous Foxconn staffer chatting to China Business. That report, after being forced through a couple of translation engines, suggests Apple sent back at least five million iPhones, and maybe as many as eight million, “due to appearance of substandard or dysfunctional problems.”
The Register calculates that the total hit to Foxconn could be $1.6bn, but that of course assumes that the numbers are accurate and that nothing can be salvaged from the rejected phones. This is unlikely.
Foxconn posted record profits in the final quarter of 2012 before experiencing a 19% year-on-year drop in the first quarter of this year. More recently, it was reported that Apple had asked Foxconn to take on additional staff to meet production demand for new handsets (assumed to be the 5S and low-cost iPhone).
It could create worries for Apple, however: with numbers that large, it could potentially create stock shortages if the handsets are existing models, or launch delays if they are new ones – though any such issues are likely to be short-lived.