Hon Hai denies Apple returned 5 million iPhones

Staff writer, with CNA

Mon, Apr 22, 2013 - Page 13

Hon Hai Group (鴻海集團) on Saturday denied that Apple Inc had returned 5 million iPhones produced at Hon Hai’s plants in China because of flaws in their appearance or malfunctions.

The China Business Journal quoted an unnamed source at the Foxconn Technology Group (富士康科技集團), Hon Hai’s trade name in China, as saying that the US consumer electronics giant had returned 5 million iPhones on March 15.

The handsets were returned either because they were not functioning well or did not meet Apple’s standards for appearance, the Beijing-based weekly said.

The number of faulty iPhones has reached 8 million units, the report said, citing the Foxconn source.

The report also said it would cost Hon Hai between 1 billion yuan (US$161.8 million) and 1.6 billion yuan to repair the defective handsets.

According to the report, Futaihua Precision Electronics Co (富泰華), a Foxconn subsidiary, has begun producing iPhones, with each of its assembly lines churning out 1,000 to 2,000 units per day.

However, the plant’s yield rate is only 95 percent, the report said.

Hon Hai spokesman Simon Hsing (邢治平) denied the figures mentioned in the report.

However, he said that the company will look into management and product yield rate issues mentioned in the report.

Institutional investors said recently that Apple products now account for more than 50 percent of Hon Hai’s revenues.

Separately, Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics maker and the flagship company of Hon Hai Group, said on Saturday that a deadly earthquake that struck China’s Sichuan Province earlier in the day had not affected the company’s production facilities in the province.

Hon Hai said its staff in the province’s capital, Chengdu, were all safe after the magnitude 6.6 earthquake.

After checks at its plants in Chengdu, Hon Hai said there has been no damage to the facilities, and operations remain normal.