Apple has rejected around 5-8 million iPhones from Foxconn because of quality issues, according to China Business. Apple is reportedly not paying for those phones so Foxconn will be absorbing the costs.
Microsoft Corporation will be receiving royalties from Foxconn’s parent company Hon Hai Precision Industry. The royalties provides broad coverage under Microsoft’s patent portfolio for devices that run the Android and Chrome operating system on smartphones, tablets, and TVs. The contents of the agreement are confidential. Hon Hai is one out of many companies that is paying Microsoft royalties for use of the Android and Chrome OS.
Hon Hai Precision Industry Co Ltd, the parent company of Foxconn, has posted a 19% decline in revenues for the first quarter compared to one year earlier. Foxconn is the primary manufacturer of iPad and iPhone devices. The drop in sales is due to weak iPhone sales.
Hon Hai Precision Industry, known by the name Foxconn, is the world’s largest electronics manufacturing company. Foxconn has acquired an 8.88% full-diluted stake in GoPro for $200 million. You may know GoPro best for their versatile cameras used by athletes. Foxconn founder and CEO will join GoPro’s board of directors. Some of the electronics that Foxconn builds include the Apple iPhone, Apple iPad, Sony PlayStation, and Microsoft Xbox.
Apple supplier Foxconn Electronics is planning to establish manufacturing plants in the United States. The company is looking at locations in Detroit and Los Angeles according to people in the industry. Supposedly these plants would focus on LCD TV production, which would be highly automated and easier than the production of the iPhone 5.
Hon Hai Precision Industry Co., the parent company of Foxconn, has reported a larger-than-expected profit since Apple paid more for the manufacturing of the iPhone. Hon Hai reported third quarter net income of 58% to NT$30.3 billion ($1 billion) according to estimates from Bloomberg based on nine-month results filed to the Taiwan Stock Exchange yesterday evening. Analysts were expecting profit of NT$23.4 billion.
After the iPhone 5 was launched, there was a major shortage of the device. One of the leading reasons for why there was a shortage is because of the manufacturing complexity in each device. According to an anonymous Foxconn executive “The iPhone 5 is the most difficult device that has ever assembled. To make it light and thin, the design is very complicated. It takes time to learn how to make this new device. Practice makes perfect. Our productivity has been improving day by day.” There were some factory scratches on the first iPhone 5 devices, but now there is a new quality control system.