Demand for the iPhone 3G is exceeding Apple’s expectations by a significant margin, and the company has now forced its manufacturing partner, Foxconn, to produce the device at the highest-possible rate.

Citing yet another of those shadowy "sources" that seem to wander about online, TechCrunch alleges Foxconn to have ramped-up its production to 800,000 units per week. The report notes this to be "above current full capacity", and warns there may be some quality control issues ahead.

Apple sold just 6 million of its first generation iPhones, but right now Foxconn is producing the mobiles at a rate of 40 million per year – and Apple was originally expected to ship just 25 million of these devices.

The iPhone is available in 23 countries today, with plans to triple availability this year.

 

"We’ve heard that Foxconn was initially told to expect sales of up to 40 million units in the first year, but that those numbers are being revised upwards sharply," TechCrunch reports.

Strategy Analytics recently pointed out that Apple’s global handset shipments fell sharply between Q1 and Q2 this year, from 1.7 million units in the first quarter of 2008 to 0.7 million in the second quarter.That was as purchasing slowed down in advance of the release of the iPhone 3G. That gave Apple a worldwide marketshare stood of just 0.2% in that quarter. 

Strategy Analytics expects Apple’s handset market share to rebound to 1.1 per cent in the third quarter – however, should TechCrunch sources be correct and Apple achieves sales of 40 million in a year, this equates to ten million in a quarter, and gives Apple a much higher slice of global handset shipments. And a commanding slice of the smartphone market….

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