Due to unprecedented levels of demand, and problems in manufacturing LCD panels and anodized aluminium cases, there have been mass shortages of the new iPhone 5 since it was launched at the end of last month. Within the space of just one hour, Apple's online store delivery estimate changed from "21st September" (the day the phone went on sale), to "2-3 weeks". In many countries a large number of people hoping to get their hands on the phone have been disappointed as they move from phone store to phone store without any luck.
Until now, Apple has had the majority of its iPhones, including the new iPhone 5, manufactured by Foxconn in China. But due to recent issues within Foxconn that have caused more delays in the production of the new iPhone, Apple has reportedly signed an agreement with one of Foxconn's subsidiaries to increase production volumes.
Foxconn International Holdings is the largest mobile phone manufacturer on the planet, and manufactures handsets for Nokia, Huawei, ZTE and others, but until now has not been used by Apple for the production of its iPhones. By tapping into this extra manpower, Apple is hoping to ramp up production levels to meet the high levels of demand for the new iPhone.
Initial stock shortages for the iPhone 5 were due to problems in producing the LCD panels it uses. The iPhone 5 features a new type of screen technology known as "in-cell panels", which combine the touch sensitivity with the LCD screen, rather than placing it on a separate layer.
Three companies were hired by Apple to produce these screens, including LG, Japan Display and Sharp, but for the first couple of weeks that the iPhone 5 was on sale these screens were only being produced by LG. The other two companies have since started the mass production of these screens.
But further problems within Foxconn's factories have resulted in more delays. A few weeks back, an argument between two employees escalated into a full blown riot and the factory had to be shut down for a short period, delaying iPhone production.
A couple of weeks later more delays were experienced as Foxconn workers protested against new quality controls from Apple. Due to a large number of complaints from consumers who have experienced chipped or damaged iPhones being sold to them, Apple placed stricter demands on the workers at Foxconn.
Unlike the iPhone 4 and 4S, the iPhone 5 is constructed primarily from anodized aluminium. This is damaged much more easily than the stainless steel used for the previous two iPhones, and as many customers are experiencing iPhones that are already damaged before they have been removed from the box, it is thought that a lot of this damage is being done during the production process.
Foxconn employees are expected to work at a very fast pace and to turn out large volumes of iPhones per hour, to meet global demand, but 4000 workers at Foxconn's factory in Zhengzhou argued that trying to meet these production demands and ensure that iPhones are not damaged is simply expecting too much from them. These employees walked out of the factory last week in protest at the demands.
Instead, Apple and Foxconn have raised the quality threshold, so that many of the iPhones that are being produced simply do not meet standards and are discarded, never to go on sale. It is thought that by expanding production to Foxconn's subsidiary Foxconn International Holdings, Apple will be able to produce larger numbers of the iPhone 5 and still maintain high standards of quality. The problems caused by the anodized aluminium cases means that this material will most likely not be used by Apple again in future products. The company is already thought to be experimenting with carbon fibre for the next iPad, and this material will most likely be used for the iPhone 5S / 6 too.
The iPhone 5 has been the most successful iPhone launch to date, selling more than 5 million units in its first weekend.
Author:
Simon Drew
