It appears that Apple may have turned away a recent batch of as many as 8 million iPhones produced for their them by Foxconn due to quality concerns.
The news is shaky as part of it has been lost in translation from Chinese to English, but the Register reports that Apple has in fact sent back between five to eight million iPhones to its manufacturer Foxconn because of quality related issues. With each phone costing $200 to manufacture, this would put Foxconn’s potential loss from the error as high as $1.6 billion. This is an unrealistic figure, however, as it is doubtful that Foxconn would simply scrap the faulty phones as opposed to fixing them or re-using their parts.
Forbes is suggesting that the original report was intended to say eight million iPhones have been returned in total, to date. This is due to the fact that it seems almost impossibly unlikely that Foxconn or Apple could make such a massive quality control gaff as to produce such a massive number of defective devices.
I certainly tend to agree with the Forbes analysis as these numbers would certainly be reasonable for the total number of iPhone 5s returned but just seem too unbelievable for a one time error. If the news does turn out to be true, expect Apple’s stock to take a significant hit.