Returning a faulty iPhone, or several million of them

25Apr13

Anyone who has bought a new mobile phone, only to find out there was a problem with it, may sympathise with Apple’s woes on product quality.  But whereas consumers may have a mixed reception when they try to return a faulty mobile.  Apple’s iPhone manufacturing partner, Foxconn in China, appear to have been more flexible with their biggest customer.

Up to 8 million iPhones have been reported as returned by Apple to Foxconn, due to manufacturing or operational performance defects, or damage to the products during the manufacture process.

While this might on first consideration sound ruinous and a sign of poor quality control by Foxconn.  The context point is that around 200 million iPhones have been sold since their original launch.  So only around 4% of the products have proven inadequate.  While not perfect, there have been occasions where mobile phones with a fail rate as high as 10% have been considered acceptable in the past.  And the iPhone is a complex product and has arguably become even more fragile recently; given that iPhone 5′s case appears to attract, rather than resist scratches.

So while Foxconn are thought to have 8 million returns and the cost of replacement phones will see Foxconn write down around $1.6 billion.  This is a cup of funds from a very large bucket.

Foxconn have been hiring 10,000 employees a week since March, as they gear up to manufacture the iPhone 5S for September launch.

Teb Crunch released an interesting data chart indicating that iPhone sales have rapidly outsold Apple Mac computers  Clearly there is a huge price difference, with Apple Macs typically costing 2-6 times the amount of an iPhone.  But the speed that iPhone sales have caught up and then exceeded Mac sales worldwide is still impressive

iPhone vs Mac sales

Read more about the Foxconn production issue on USwitch: HERE

Read more about the sales comparison between Apple iPhone and Mac at Tech Crunch: HERE

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