Apple's Defective Phone Returns Could Cost Foxconn $160 Million (If Any of This is Real)
Reports in the Chinese press over the past few days have been suggesting that Apple has returned around 5 million iPhones to its chief manufacturer Foxconn, claiming they are not fit for sale. Exactly what's wrong with the phones isn't clear, but what is clear is that if the reports are true, Foxconn could be facing rather massive losses. Citing an estimated repair cost of 200 RMB ($31) per returned phone, for example, the Beijing Business Times estimates that the company's total losses could break 1 billion RMB ($158 million). Because Foxconn reportedly makes only between 1.5 and 2 billion RMB in yearly profit for the iPhones it produces, the company could be looking at around a sixty percent drop in profits this year. That sounds grim, but it's worth keeping in mind that as of yet, none of these numbers are official. It's possible that the 200 RMB per phone estimate is far too high, although it's also quite possible the phones will cost more than that to fix. It's also possible that none of this is even true; while it has been widely reported in the Chinese tech press, the Chinese tech press has been known to make stuff up, and neither Apple or Foxconn have confirmed this story. We've reached out to Apple for comment and will update this story when the company responds (which we expect to be never).
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