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Hon Hai denies Apple has returned 5 million iPhones

TAIPEI, Taiwan -- Hon Hai Group denied Saturday that Apple Inc. has returned 5 million iPhones produced at Hon Hai's plants in China because of faulty appearance or malfunctions.

The China Business Journal quoted an unnamed source in Foxconn Group, Hon Hai's trade name in China, as saying that the U.S. consumer electronics giant had returned 5 million iPhones on March 15.

The handsets were returned because they either were not functioning well or did not meet Apple's standards in terms of appearance, the Beijing-based weekly said.

The number of faulty iPhones has reached 8 million units, the report said, citing the Foxconn source.

The report also said it will cost Hon Hai 1 billion (US$161.8 million) to 1.6 billion Chinese yuan to repair the defective handsets.

According to the report, Futaihua Precision Electronics Co., a Foxconn subsidiary, has begun producing iPhones, with each of its assembly lines churning out 1,000 to 2,000 units per day.

The plant's yield rate, however, is only 95 percent, the report said.

Hon Hai spokesman Simon Hsing denied the figures mentioned in the report.

He said, however, that the company will look into issues of management and product yield rate mentioned in the report.

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