Foxconn admits to falling behind iPhone 5 demand

By , Nov 7, 2012

Terry Gou, the CEO and chairman of Foxconn which assembles Apple’s iPhone and many other products, admitted in an interview with Reuters today that his company continues to face production hurdles meeting the massive iPhone 5 demand. It’s not surprising that the world’s largest contract manufacturer is coping with production issues.

The company recently acknowledged that the iPhone 5 is “the most difficult device” it has ever assembled. In particular, the sophisticated handset with its in-cell display assembly technique and the excquisite Unibody chassis is proving challenging even for Foxconn to make in enough quantities. On top of that, Apple has tightened quality control following reports of teething issues with scratches and nicks from “normal” wear and tear

Reuters quoted Gou who told reporters after a business forum:

It’s not easy to make the iPhones. We are falling short of meeting the huge demand.

Gou declined to comment on rumors that Foxconn International Holdings had taken on some production. He also told The Wall Street Journal that “market demand is very strong, but we just can’t really fulfill Apple’s requests”.

Foxconn is shipping “far fewer” units than expected, Gou noted, blaming production woes on the device’s precise design, but stopped short of detailing those. He also declined to say how long it will take for those issues to be solved.

The difficult iPhone 5 manufacturing process even spurred a massive brawl between workers and management at Foxconn’s Zhengzhou plant. At press time, the US online store showed a 3-4 week wait for iPhone 5 orders.

As if all of the above wasn’t enough, Sharp, a supplier of in-cell display panels for the iPhone 5, has enough problems of its own. The news gathering organization in another report suggested Apple should offer “financial incentives” to help save Sharp from going bankrupt.

Sharp lost a whopping $1.3 billion in early 2012 and is facing another $2.3 billion due in 2013. It is now in the midst of a restructuring plan involving layoffs and pay cuts in an attempt to prevent a sell off of its buildings and factories to pay off creditors.

Losing that potential lifeline from Foxconn was another setback.

As our own Cody Lee reported yesterday, Sharp is now hoping that Apple would come to the rescue and today’s post by independent analyst Horace Dediu suggests that the iPhone maker may have poured as much as $2 billion into Sharp’s production facilities, presumably in exchange for both continuity of supply and a balanced supplier base (offsetting Samsung, another Apple supplier).

So, problems with display panel supply on Sharp’s part coupled with complicated assembly process continue to plague Apple as the company copes with high iPhone 5 demand.

The company sold out of initial stock during first 24 hours of India launch. The handset is currently available in 31 countries. Apple is planning to roll out the iPhone 5 in China and a total of hundred markets across 240 carriers by year’s end.

Did you already purchasedyours?

Mine’s still in the queue.

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  • http://twitter.com/myorangeisstuck wahaha

    looks like things aren’t going smoothly for apple

  • http://twitter.com/aomia syler

    that would explain why it took a month to get my iPod nano and why i had to drive 100 miles to get my iPhone 5. only 1 place had i5 with in 500 miles of where i live and i live in a good size city.

  • http://www.facebook.com/Luishalo22 Luis Perez

    Plus you lost the case with the company ifone, the Mexican company. So probably no iPhone 5 for Mexico . -1 country . The iPhone 5 in Mexico is overprice .

  • http://www.facebook.com/aeron.mcaerhon Aeron Mcaerhon

    Its karma people.. Uhhh ipad 3 customer screwed and ipad mini retina must have? Oh yeah the next gen of ipad mini is with the retina. .great upgrade. .great at screwing people.

  • CollegiateLad

    You always want to be able to meet demand. But not being able to keep up with demand is a better problem than no demand.

    There are a lot of dust collectors out there – I won’t drop names though. Lol

    Glad I got mine early.

  • http://twitter.com/arskka ArthurT

    In México is also out of stock

    • http://www.facebook.com/profile.php?id=753610413 Jose Antonio Gomez

      In Mexico iPhone 5 is very expensive and you only can have it with a New contract, if You have been costumer of the carrier They don’t give a shi.t.., only new costumers and the price is 900.00 Dollars..

      • http://twitter.com/arskka ArthurT

        You can buy it unlocked via apple store, but yes it’s expensive

  • http://www.facebook.com/profile.php?id=1769816470 Albion Goxhaj

    Lol. After long time I decided to stop at this rediclous. I am surprised this blog is still alive. I phone and apple is past history my friends. That’s what you get when you constantly rip people off. Android is the future guys stop wasting your money with apple

  • http://twitter.com/edsong97 Edson Zazueta

    here at mexico, there are no more iPhones since it was released here in november 2nd…. still waiting

  • Phlip

    Maybe i’ll get mine when they release phone 6 the 5 should be on sale then