updated 06:39 am EDT, Wed October 10, 2012
iPhone 5 production being slowed by tighter quality control standards
Apple’s decision to use an aluminum unibody chassis for the iPhone 5 is causing supply constraints, reports Bloomberg. Apple chose the material for its light weight and resistance to cracking, it is also softer than the Gorilla glass used on the back of the iPhone 4 and 4S. It has caused quality control issues during manufacture resulting in lower production yields at Foxconn following pressure from Apple executives after it emerged that iPhone 5s with scratches, scuffing and nicks were being shipped to customers.
Although Phil Schiller, Apple SVP of Global Marketing, issued a statement saying “Any aluminum product may scratch or chip with use, exposing its natural silver color,” Schiller did not suggest that it was normal or to be expected when getting it straight out of the box. Apple executives were reportedly unhappy that iPhone 5 were shipping to customers with imperfections out of the box. Bloomberg also spoke with five Foxconn factory workers on the condition of anonimity who said that because the iPhone 5 uses aluminum, it is also much easier to scratch or damage during every stage of the manufacturing process.
Last week, one Foxconn factory that produces the iPhone 5 had to be shut down altogether following a worker revolt over the tightening quality control standards. At the time it was reported "there was a fight between workers and quality control inspectors in Area K that led to the damage in inspection room CA, the injury of some people, and the hospitalization of others.”
The slowdown in iPhone 5 production may have also taken a toll on Apple’s share price, which has dipped as much as ten percent in recent days. RBC Capital Markets have cut their forecast for iPhone 5 sales as result, now estimating sales of 49 milllion units for the quarter against earlier expectations that Apple would sell through 57 million.
“These stricter standards would lower the yield on good products being shipped out,” Jeff Pu, a Taipei-based analyst at Fubon Financial Holding Co told Bloomberg. “They’ll handle it by increasing labor and machinery, and Apple may even use its cash to buy new equipment to assist Foxconn.”