When Apple introduced the iPhone 5 last fall, it made sure to mention its complex manufacturing process. “Never before have we built a product with this extraordinary level of fit and finish,” Jony Ive said during a video on the handset.

The extra effort has obviously paid off, as the iPhone 5 has been very popular with consumers. But it’s also causing problems for Foxconn, Apple’s manufacturing partner, who continues to struggle with the device’s intricate production methods…

The Register (via 9to5Mac) points to a new report from China Business:

“Foxconn has apparently botched a batch of iPhones, which Apple returned to the contract manufacturer because they were not fit for sale.

Details of just what went wrong are sketchy, as the source for this tale is an anonymous Foxconn staffer chatting to China Business. That report, after being forced through a couple of translation engines, suggests Apple sent back at least five million iPhones, and maybe as many as eight million, “due to appearance of substandard or dysfunctional problems.”

If true, this is bad news for both companies. With manufacturing costs around $200 per handset, Foxconn would have to eat in upwards of $1 billion to cover the bad batch. And it would leave Apple with shorter-than-expected iPhone supply.

Foxconn’s been having problems with iPhone 5 production from the get-go. There’s been several reports of quality control issues since the handset launched last fall, with many consumers complaining of scratches—particularly on black models.

In fact, the device’s complicated manufacturing process sparked a riot in one of Foxconn’s plants last fall, as workers clashed with management, claiming Apple set the quality bar too high. Foxconn was forced to temporarily shut down the factory.

It’ll be interesting to see what effects, if any, this has on Apple moving forward. Could the ongoing production issues cause the company to rethink the design of its next-gen handset? Interestingly enough, the iPhone 5S is expected to be delayed.

  • Boss

    Probably won’t get the iPhone 5S until Jailbreak is out on it

    • Gorgonphone

      me too and i may skip it and wait for the 6..

      • Your lost … Both of you 🙂

      • Boss

        Why already got an iPhone 5 I don’t see Apple adding much new stuff making it worth the upgrade iP5 is already fast enough for me

      • I don’t upgrade every year too. But if there will be a good upgrade I will this year. I had iPhone 2g, then 3G, then iPhone 4, and now I have iPhone 5.

  • Gerard Hampton

    but i thought iphones were the most reliable handset according to this site. 5-8M faulty ones returned and who knows how many more out there waiting to break down. That seems like a lot.

    • Jeffrey Jue

      Faulty could mean anything, not just reliability or anything that affects functionality. It could mean a simple scratch, color mixture not correct, an unusual gap, or a chip on the glass–something that doesn’t affect the performance of the product but is noticeable to the consumer. This can apply to anything manufactured, not just iPhones.

    • Falk M.

      I suggest reading the articles from here on.

    • As the article clearly indicates, the 5-8M phones were sent back to Foxconn before they hit the market precisely because they weren’t fit for sale. That means they never saw the market.

      Any consumer reliability judgements (for any phone, or any item for that matter) would be based on phones that actually do make it to market.

    • If there were more apple would’ve retuned them already! It didn’t reach the costumer… You don’t have to worry about it. But you are so funny hahaha

  • Falk M.

    I love my iPhone 5 and I proudly look at it knowing I own a big piece of Apple history. 🙂

  • Gorgonphone

    interesting cause every single black iphone5 ii have seen has nasty scuffs and scratches on it.. i hope they fix that in the 5S

  • AdamChew

    So it would be better that customers get the defective phones rather than them being returned.

    So you seriously think Foxconn will not salvage the parts to be used again.

    Hate to say this get a brain.