Foxconn 'Falling Short' of iPhone 5 Demand














On Wednesday, Foxconn CEO Terry Gou publicly acknowledged the difficulties Foxconn is facing in producing the tremendous quantities required for Apple’s latest iPhone.


“It’s not easy to make the iPhones. We are falling short of meeting the huge demand,” Gou told reporters following a business forum, according to a Reuters report.


Apple saw blockbuster iPhone sales this past quarter with the introduction of the iPhone 5, and that demand is likely to continue through the holiday season, bolstered by the fastest iPhone rollout schedule to date. “We have a feature-rich new industrial design available to a larger audience of customers because of the number of carriers,” Forrester analyst Charles Golvin told Wired. “That would lead me to believe that there’s meaningfully higher demand than the iPhone 4 or 4S.”


There are also manufacturing challenges with producing the phone itself.


“The issues with the new iPhone stem from the fact it is thinner than prior versions, and any time you reduce the thickness you’ve got much less room to work with and you increase the likelihood for manufacturing error,” IHS senior principal analyst Tom Dinges told Wired via e-mail. “The manufacturing process for the iPhone is still relatively high on labor as opposed to automation, which also increases the likelihood for manufacturing issues when you shrink the size of the device.”


One of the bigger problems plaguing the new iPhone is its aluminum rear plate, which is prone to chips and scratches because aluminum is a softer metal. Also of note: The iPhone 5 is the first iPhone to have the touch panel integrated with the display components (referred to as an in-cell display). Produced solely by LG Display to start with, this new Retina Display panel has definitely been a bottleneck for iPhone production.


“When you combine the issues with meeting the quality standards with a very strong global rollout it becomes a real challenge for the manufacturing partners to keep up,” Dinges said.






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