Recent reports of Apple returning as many as 8 million faulty units which may cost Foxxconn group up to $256.8 million in repair, were denied by a Hon Hai Group spokesman Saturday.
A report from China Business Journal cited an anonymous source from Foxxconn, a trading name for Hon Hai Precision Industry Co., in China, saying that Apple Inc. had returned as many as 8 million iPhones after discovering problems over functions and appearances, which may cost $256.8 million for labor ($32 per piece).
In a recent report from Business Insider last Saturday, Barclays analyst Ben Reitzes said that Foxxconn was undergoing some manufacturing issues since end of last year. In addition, changes in Foxxconn's integrated Digital Product Business Group (iDPBG) management may pose a threat to Hon Hai's operations. Since end last year, iDPBG, Hon Hai's most profitable group, has seen three different management heads trying to manage the business. After losing Michael Chung, who went on a long vacation in late 2012, and then the resignation of Chung Cheng-Yu in late March, Chen Hui-Long was appointed as the head of the business group, who was not a part of iDPBG previously.
However, in response to the China Business Journal report, a spokesperson for Hon Hai Group, Simon Hsing, said that the figures mentioned in the news report are false and the company is looking into the management issues and production rate.
Currently, Foxxconn is only producing 1,000 to 2,000 iPhones everyday, which accounts for 95 percent of the production rate, according to a report from ZDnet.
Apple is the most profitable and number one customer of Hon Hai group, accounting for more than 50 percent of Hon Hai's revenues.
