iPhone 5 Builder Foxconn Says Supply Can't Match Demand

The complex manufacturing process employed to make Apple's iPhones is hampering Foxconn's ability to make enough of the smartphones.

Apple's latest iteration of its popular smartphone, the iPhone 5, has been a smash hit—so much so that an executive at the company that builds the device, Foxconn Technology Group, admitted that meeting demand for the tough-to-build device is challenging.

Foxconn Chairman Terry Gou told reporters following a business forum that the difficulty in manufacturing iPhones is a major hurdle. "It's not easy to make the iPhones. We are falling short of meeting the huge demand," Reuters quoted him as saying. Gou declined to address the reports suggesting the company’s Foxconn International Holdings division had stepped up to help with manufacturing.

The iPhones are lauded for their high quality in both design and build materials, resulting in a handset that is crafted with precision tools and looks and feels expensive. The handset’s Unibody aluminum enclosure features a diamond-cut beveled edge, which is polished and textured. According to a video on Apple’s Website concerning the manufacturing process, the back of iPhone 5 is made of anodized 6000 series aluminum, the same material used in Apple notebooks, with inlays along the top and bottom made of ceramic glass or pigmented glass.

A sapphire lens cover for the iPhone’s iSight camera and integrated touch technology for the display further complicate the process. The touch technology means instead of a separate layer of touch electrodes between display pixels, the pixels do double duty, acting as touch-sensing electrodes while displaying the image at the same time.

“During manufacturing, each aluminum housing is photographed by two high-powered cameras. A machine then examines the images and compares them against 725 unique inlays to find the most precise match for every iPhone,” Apple states on a page dedicated to the iPhone’s manufacturing process.

Apple sold 5 million of its new iPhone 5 handsets just three days after its launch Sept. 21. The device is the thinnest and lightest iPhone ever and was completely redesigned to feature a new 4-inch display using Apple’s high-definition Retina technology, as well as an Apple-designed A6 chip for improved processing performance. The handset is also Apple’s first to feature 4G Long Term Evolution (LTE) network capability and a smaller connecting port called Lightning.

The iPhone 5 is not the only Apple device that is the target of supply constraints. Following the release of the iPad Mini, a 7-inch version of the company’s popular tablet, concerns surfaced that not enough of the tablets could be produced to meet demand during the holiday-shopping season. As recently as Oct. 24—the day after the iPad Mini was unveiled—an NPD DisplaySearch report by Senior Analyst Richard Shim said that although Apple is expanding its partner base for the iPad Mini, issues with the display panel would limit initial shipments. A similar report from IHS iSuppli noted that sales projections for the iPad Mini were conservative figures that could be affected by how well Apple would be able to meet demand.