Hon Hai Chairman Blames iPhone 5 Design For Production Problems

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.

Is a solution in sight? If we’re looking to Hon Hai for answers, we’re not getting them:

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.
Via: WSJ.com

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.

Solution?

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

  • http://twitter.com/unbeliever008 Jae. Just J.

    Apple will have pay Foxconn more to hire better skilled labor. so either the phone price goes up to maintain current margins or in lieu of that, margins shrink.

    • warbeast

      yh coz its not like we all pay way over the odds for somthing that you would think would already be made by the best of the best to have that over price tag

  • KOOMOO

    Well I been waiting for a factory unlock since oct…. I guess could understand the quality control about people nicks and scratches on there iPhone… My impatience made me bought a galaxy s3 unlock and sold it back the next day (just not my cup of tea) I’m starting to think end of nov/dec for factory unlocks in the USA.

  • High quality

    This is crazy! It’s not apples fault for making a high quality product. This is one thing that other manufactures don’t have. Foxconn needs to step up to the plate of manufacturing. If apple starts to let quality slide. The products will never be the same.

  • bob

    You’d think that the engineers could figure out some robotic way of cranking these out. If they could, maybe Apple could move assembly to the US – with a lot fewer workers but with good paying jobs. The auto industry is only competitive because they’d need millions of workers and would go broke with labor costs, if not for robotics. Automation is the key but with all of the quick product cycles, maybe cheap Chinese workers by the hundred of thousands is cheaper than engineering tooling costs. You’d think the number of units produced could make these costs work. Oh well, I’m sure they’ve looked at this!

  • sheep

    Not surprised everyone thinks manufacturers need to step up. Anyone thought that maybe apple made them complicated to prevent copying. 2 sides to every story.