The no-quibble terms were a legacy of the iPod, a relatively simple product and one for which Foxconn was directly sourcing many of the parts. Apple had taken control of the more strategic and high-value-added items, but Foxconn had sourced commodity components on its own. Lacking any data on the iPhone before it was released, Foxconn treated it like an iPod and agreed to the same terms. But consenting to the same clause for such a different product proved to be a disaster. For the first iPhone, the percentage of units that came back within twelve months—what Apple calls TWR, standing for total warranty repair—was around one in seven. There were problems with the home button and the volume controls, and a spate of issues that didn’t meet standards from the perspective of field durability. Foxconn wasn’t necessarily building it poorly; it was simply the first consumer electronics product of that complexity to be used multiple hours a day. Apple’s quality standards were high, but they weren’t built to meet smartphone addiction—a concept that hadn’t really existed before. “You use an iPod occasionally, but you use the iPhone all the fucking time,” says an executive involved in manufacturing the original unit. The no-quibble clause was maintained for at least two to three generations of iPhone, until it got to a point where Foxconn was losing money and they had to plead with Cupertino to amend the contract. “It became untenable from a business standpoint,” says a person familiar with the change.
No comments:
Post a Comment