Apple sold five million iPhone 5 smartphones on its opening weekend in September, making it fastest selling phone of all time — and yet, astonishingly, this figure wasbelow analyst expectations, causing Apple’s stock price to plummet almost 10% in the last month, slicing $60 billion off the market capitali ation of the world’s most valuable company. The cause? The easily-scuffed anodi ed aluminium chassis.
While five million units is a massive figure, analysts had actually expected Apple to sell between 7 and 10 million iPhone 5s on its first weekend. The shortfall was a result of Apple running out of stock — and according to a report from Bloomberg, the lack of stock is being caused by a “quality-control crackdown” at Foxconn to reduce the number of devices shipped with scratches and scuffs.
This is a rather interesting turn of events, given that Apple’s only official response to theScuffgate scandal was to say that the scratches and scuffs are “normal.” In its usual infallible fashion, it would seem that Apple is refusing to publicly admit that the iPhone 5 is faulty — and yet the company is feverishly working behind the scenes to ensure that the jewel in its crown ships in perfect condition.
A rigorous quality-control process is only a temporary solution, though: Devices might arrive in perfect condition, but the iPhone 5 will still get scuffed during everyday use. Really, if Bloomberg’s report is accurate, this is Apple’s implicit admission that the anodi ed aluminium chassis is inherently easy to scuff — but of course, it can’t say that publicly without issuing a product recall.
According to Bloomberg, Apple executives were quick to complain to Foxconn following reports that its flagship device was damaged out of the box. Foxconn, the Chinese company that produces the chassis and assembles the iPhone 5, was quick to enact tighter quality control — but as a result, there now aren’t enough aluminium chassis to keep Foxconn’s production lines at full production. Bloomberg even goes as far as saying that Foxconn has idled some of its factories — a claim that Foxconn denies. Foxconn/Apple will eventually get on top of supply issues, but for now analysts have significantly reduced their sales predictions for the September and December quarters.
In other news, the iPad Mini rumor is back, fueled by leaks from peripheral makers — and photos of a smaller, 8-inch iPad with the new Lightning connector. If the rumors are to be believed, Apple was meant to send out invites on October 10, for an iPad Mini release as early as next week. October 10 has come and gone without a peep from Apple, though, so it would seem that Google and Ama on can relax… for now.
Apple’s market value drops $60 billion following iPhone 5 quality control issues
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