According to published reports out of Asia Monday morning, Apple may have a significant production problem on its hands.
Sources close to the supply and manufacturing chain in Asia indicate that Apple has returned somewhere between 5 and 8 million iPhones to Foxconn, one of its key manufacturing partners.
The devices are reportedly “defective,” although sources haven’t elaborated on the exact nature of the underlying problems. Nonetheless, the devices are apparently being returned to Foxconn.
When the smoke clears, Foxconn could be forced to absorb a $1.6 billion loss due to replacement costs.
China Business is silent on which model of iPhone failed Apple’s quality tests. If it’s the current iPhone 5, or the still-on-sale 4S, the impact of eight million phones failing to appear would punch a two-or-three-week hole in Apple’s supply chain.
As of this writing, it isn’t clear if the aforementioned setbacks will impede Apple’s rumored plans to introduce the iPhone 5S this summer.