Over the years, Apple’s iPhone sales have grown exponentially. This has put a lot of pressure on the likes of Foxconn, which is among the chief manufacturers of the flagship smartphone, affecting the quality of iPhone production. Apple has returned as much as 8 million faulty iPhones to Foxconn to date.
With millions of iPhones flying right off the shelves every single month, it is only natural that Foxconn is working under high-pressure. In the past, too, a number of quality-related issues have been flagged regarding the iPhone units coming from Foxconn’s production lines.
To curb this problem, Foxconn recently replaced the director of its integrated Digital Product Business Group (iDPBG), which is responsible for churning out the company’s most profitable product, the iPhone. However, despite this recent development, quality issues continue to crop up in the iPhones coming from Foxconn.
According to a recently published report in China Business Journal, Apple returned 5 million iPhones to Foxconn on March 15. Inside sources claim that Apple is in the process of returning more units and the total number could reach a whopping 8 million faulty units.
Foxconn may be significantly impacted by such a huge return rate of faulty units. The company has a labor cost of $32 per iPhone and if it has to replace all the 8 million faulty units, it will incur a bill of some $256.8 million. In other words, we can expect the company’s quarterly profits to be trimmed down significantly because of these additional costs.