Citing incredibly high demand for the iPhone 5 and quality control difficulties, Foxconn Chairman Terry Gou told Reuters that his company's Hon Hai Precision Industry unit is struggling to assemble enough of the devices to meet Apple's requirements for the latest iPhone.
Talking to reporters after a business forum, Gou said, "It's not easy to make the iPhones. We are falling short of meeting the huge demand." Some brokerage firms have reported that another Foxconn subsidiary, Foxconn International Holdings (FIH), is now beginning to build the units. Gou declined to comment. FIH normally assembles phones for manufacturers such as Huawei and Nokia.
Several weeks ago, an anonymous Foxconn official told the Wall Street Journal that "the iPhone 5 is the most difficult device that Foxconn has ever assembled." Specifically, the aluminum chassis and in-cell touch panel displays have created production headaches. The anodized chassis has sometimes shown wear or scratches right out of the box, while yield rates for the displays were initially low.
Failing to meet demand for the iPhone 5 during the critical holiday buying season could have a negative impact on Apple's earnings and share price.