People at Foxconn have already talked about how hard it is to build the iPhone 5 and production slowdowns are due to stricter quality control, and today Hon Hai Chairman Terry Gou spoke to reporters at an economic forum reiterating that design and quality issues are slowing down production. Does this mean that Apple is making devices that are just too hard to build in quantity or that manufacturers are just facing the beginning of a “new normal” in making today’s high tech devices?
With iPhone 5 ship times in the Apple Store pegged at 3-4 weeks and in-store supplies varying widely (when I picked up my iPhone 5 last week there were no black 32GB models) and iPad 4 production has already caught up with demand, iPhone 5 production isn’t even close. And the challenge is clear: the iPhone 5 isn’t just harder to build, it’s harder to assemble without nicking or scratching key parts.
Supply-chain problems have led to a long wait for the iPhone 5 since the device’s late-September launch, analysts said. The scarcity of the phones has been weighing on Apple’s share price as well, as investors are concerned Apple may not be able to meet consumer demand in the near future, weighing on its earnings.
“Market demand is very strong, but we just can’t really fulfill Apple’s requests,” Taipei-based Hon Hai Precision Industry Co. Chairman Terry Gou told reporters on the sidelines of a local economic forum.
Mr. Gou declined to say which of the phone’s design features has caused production issues and how long it will take for those issues to be solved. He also refused to comment if Hon Hai plans to outsource some of the iPhone orders to other makers, or to its Hong Kong-listed subsidiary Foxconn International Holdings Ltd. as some analysts suggested last week.
I’m sure this galls Tim Cook and Jony Ive to no end. Tim, the master of the supply chain, can’t be happy that the production partners can’t make devices fast enough to meet demand—and that’s pushing the stock price down. Jony must be frustrated that the beautiful designs he and his team make are just almost too advanced to be made.
Should Apple just develop less complex (but still cool) products that are easier to manufacture? Or do manufacturers need to step up to the plate and accept the new world of consumer devices?
I think the answer is somewhere in the middle. And in the meantime we can only hope that everyone figures out a way so we can dream big devices—and make them too.
See also: Reuters