iPhone 5 supply contrained due to stricter quality control measures regarding scratches

Wed, Oct 10, 2012


Aside from all of the hoopla surrounding Apple’s new Maps app, the iPhone 5 launch has essentially gone off without a hitch. If anything, sales for Apple’s new smartphone remain so strong that Apple is reportedly still struggling to keep supply on par with demand.

That said, Bloomberg reports that increased quality control regarding scratching and scuffing on the iPhone 5 may to be blame. You might recall that some users complained that their new devices came with scratches right out of the box (for the record, the iPhone 5 in the photo above was scratched deliberately). Addressing the issue a few weeks ago, Apple executive Phil Schiller emailed a worried user and explained, “any aluminum product may scratch or chip with use, exposing its natural silver color. That is normal.”

Nevertheless, Apple has enacted stricter quality control standards at its Foxconn factory which is lowering the total output of iPhone 5s.

The scrapes, which sparked complaints with the iPhone’s debut last month, are due to Apple’s decision to use a type of aluminum that helps make the smartphone thinner and lighter. Senior Apple managers told executives at Foxconn near the end of September to tighten production standards, said the person, who asked not to be named because the matter was private.

Stricter benchmarks have hampered production of the iPhone 5’s anodized aluminum housings, forcing Foxconn’s Hon Hai Precision Industry Co. to idle factories, the person said. The slowdown is heightening supply concerns that have cost Apple about $60 billion in market value since the iPhone debut — a shortcoming of the drive to imbue products with qualities that make them alluring yet more difficult to manufacture.

Compounding matters, according to workers at Foxconn Bloomberg spoke to, is that each step in the manufacturing process provides an opportunity for the back shell to get scratched up. And so with the number of scratch-based complaints from users rising, Apple executives took to Foxconn and explained that they weren’t happy.

As Foxconn Technology Co. tightened quality standards, fewer metal housings passed muster. That’s meant a shortage of parts in the warehouses of Hon Hai, which assembles the device and had to halt production for a day at one of its factories in Shenzhen on Oct. 6, according to the person with knowledge of the situation.

At the end of the day, there are tradeoffs to be made in any manufacturing process. The anodized aluminum used on the iPhone 5 is less prone to cracking than the glass used on the back of the iPhone 4 and 4S. The tradeoff, however, is that it tends to scratch up much more quickly. Me personally, I’d rather have a functional iPhone with a scratch or two than a blemish free iPhone with a shattered glass casing.

In any case, Bloomberg relays that the stricter quality control measures have increased pressure on workers and ultimately resulted in 4,000 employees walking “off the job in protest.” Foxconn, meanwhile, maintains that no such thing occurred that iPhone 5 production was never suspended.


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