Foxconn warns over iPhone 5 supply

Posted by Emma Woollacott

Employer of the year Foxconn has admitted it can't keep up with demand for the iPhone 5, saying it's shipping 'far fewer' than requested.

The problem is, apparently, that demand is higher than expected and the device too fiddly to put together easily - especially given that the company's now got rid of all its nimble-fingered child workers, perhaps.

But Foxconn's also been forced to improve quality control after customers complained that the phone's aluminum body was prone to scratches - often at the assembly stage.

"We can't really fulfil Apple's requests. Our shipments are insufficient... given the huge market demand," Foxconn chairman Terry Gou told AFP last night.

Apple sold five million iPhone 5s during the device's first three days on sale in September, and demand has remained high since. Gou wouldn't say whether the company had, as rumored, outsourced some production to another manufacturer, or another unit within the group.

But it's more bad news for Apple, which has already seen its share price fall in recent weeks, thanks to concern over just these sorts of supply issues.

Apple's been trying to minimize its dependence on Samsung - with which it's engaged in a series of patent battles - and, says Asymco analyst Horace Dediu, may have recently tipped as much as $2 billion Sharp's way to make sure its display supplier survived.