Apple has returned between five and eight million iPhones to Foxconn over quality control issues. The report, which comes from an anonymous Foxconn worker speaking with China Business, said the issues are "due to the appearance of substandard or dysfunctional problems."
If true and if the figures are accurate, the returns could cost Foxconn somewhere around $1.6 billion. That of course is assuming that the returned phones are trashed which is unlikely. A more probable scenario would see Foxconn disassemble the faulty phones and reuse whichever parts are still in acceptable condition.
It's unclear which specific handsets are affected nor is it known over what period of time the returns encompass. If the phones in question are current generation models, Apple could be facing some stock shortages in the coming months. Worse more, if the returned iPhones are the upcoming model, Cupertino may have to delay the launch past the rumored June / July timeframe.
All of this is in addition to recent bad news out of Foxconn with regards to financial earnings. The manufacturer posted record profits for the fourth quarter of 2012 before falling 19 percent (year-over-year) in the first quarter of 2013. Analysts blamed iPhone orders for the decline in Foxconn sales, claiming their revenue depends too much on Apple.
The next iPhone, which most believe will be a beefed up model of the current version, is expected to be unveiled on June 20. The handset would then launch sometime in early July if recent rumors are to be believed.