Design, supply component issues may be hurting iPhone 5 production

Foxconn may be having supply issues tied to new iPhone 5 components and Apple's stringent production specifications

Stringent iPhone 5 production specifications established by Apple and supply issues with new components like the Lightning port and larger screen could be responsible for Foxconn's delays of the handset, analysts said on Wednesday.

Foxconn, a Chinese contract manufacturer that assembles Apple devices, on Wednesday said it was shipping fewer iPhones due to design and production issues, according to a news story in the Wall Street Journal on Wednesday.

Foxconn chairman Terry Gou said iPhone demand was strong, but that the company couldn't meet Apple's requests to supply more phones, according to the news story. He did not provide further details on the design and production issues causing the delays. However, analysts said that an overwhelming demand for the iPhone 5 and supply chain issues could be hurting Foxconn's timely production of the device.

Apple sold over five million iPhone 5 units in the first three days after the new smartphone started shipping on Sept. 21. The phones have been in short supply since, and Apple's online store currently reflects a three- to four-week wait for the device.

Foxconn runs a tight ship, and it's more than likely that the iPhone shipment delays out of the factory are likely related to supplies of "components and Apple's control related to a component," said Jim McGregor, principal analyst at Tirias Research.

Apple selects component suppliers, and sometimes multiple vendors supply a single component to Foxconn. Foxconn's delays could result from a lack of consistency among parts supplied by different suppliers.

"That leaves a contract manufacturer with very limited options," McGregor said.

Sterne Agee analyst Shaw Wu in early October pointed to a limited supply of components like in-cell touchscreens as a reason for iPhone shortages. Wu also pointed out that Apple has set stringent demands related to iPhone production.

"Our sources indicate that iPhone 5 is not easy to build with [Apple's] very high standards where it aims to produce each model to be an exact replica where variance is measured in microns," Wu wrote in a research note on Oct. 9.

Foxconn may be having trouble adapting the production line and getting parts for many of the new features in the iPhone 5, said Dan Olds, principal analyst at Gabriel Consulting Group. New features include the Lightning port and casing.

"It's very hard to scale up any supply chain to produce these kinds of numbers of technical products in such a short time period," Olds said.

Roger Kay, president of Endpoint Technologies Associates, agreed, saying that there have also been issues with the finish and polishing of the iPhone.

"I would say in general that the production quality requirements have grown more stringent over time as the expectation -- Apple's and end users' -- have risen. Consistently high quality production is difficult," Kay said.

Labor unrest and high turnover rates in Chinese factories may have contributed to iPhone 5 production delays, analysts said.

But the iPhone 5 supply issue is more visible now because of the high competition in the smartphone market, Gabriel Consulting's Olds said. In the past, people would wait for an iPhone, but that's not the case anymore.

"Android phones are much more competitive and I think that some of the folks looking at a four- to five-week wait for an iPhone 5 might take a hard look at giving an Android device a shot," he said.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags smartphonesAppleiPhoneconsumer electronicsComponents

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?