By Khurram Aziz | Nov 09, 2012 09:47 AM EST
Foxconn chairman Terry Gou, whose company manufactures Apple's smartphones and tablets, says the Taiwanese firm is struggling to meet global demands for the latest iPhone 5 device.
Speaking to reporters at a business forum in Taipei, Gou admitted, "Market demand is very strong, but we just can't really fulfill Apple's requests."
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His admission has led to fears that Apple may look elsewhere to fulfil its orders or face increasingly frustrated consumers.
Gou said that one of the reasons for the difficulty in meeting orders was because the iPhone 5, which sold over five million handsets in its launch weekend according to Apple, was difficult to produce.
Last month, an unidentified Foxconn worker told the Wall Street Journal that making the iPhone 5 was "very complicated," describing it as "the most difficult device that Foxconn has ever assembled." http://blogs.wsj.com/chinarealtime/2012/10/18/hon-hais-explanation-for-iphone-5-shortage/
"It takes time to learn how to make this new device," the unnamed worker told the newspaper.
The iPhone 5 is taller and slimmer than the previous iPhone 4S, which has required a change in the manufacturing process. It also has a new aluminium rear plate, which is prone to chips and scratches, necessitating stricter quality control.
In October, overworked quality control inspectors at Foxconn's mainland China facilities reportedly went on strike in protest against the new tough-to-meet production standards. The company has also come under the spotlight following a string of suicides at its Chinese plants in recent years.
Foxconn employees over a million people in China as is the largest contract electronics maker in the world, assembling products for Apple, Sony and Nokia, among others.
Apple's chief financial officer Peter Oppenheimer said on October 25 that demand for latest iPhone 5 continued to outstrip supply, but that the company was working hard to catch up.
"There are costs associated with such dramatic change and demand," Oppenheimer said in an interview with CBS news.
"The iPhone 5, iPad Mini, iMac, MacBook Pro 13-inch, iPod Touch and iPod Nano have completely new form factors with great new features and we've never before introduced so many new form factors at once. All of these products have higher costs than their predecessors and therefore lower gross margins as they are at the height of the cost curve."
Apple has not commented on Gou's comments or on the supply constraints surrounding its latest smartphone.
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