Foxconn battles rumors of defective iPhones and a link to an attempted bombing

Hon Hai Chairman Terry Gou, hoping that bad things don’t come in threes.
Hon Hai Chairman Terry Gou, hoping that bad things don’t come in threes.
Image: AP Photo
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The PR people at Taiwanese contract manufacturer Hon Hai, popularly known as Foxconn, have already had a busy week, and it’s only Monday. The company is fighting two separate stories, both of them juicy. The first alleges that Apple, its biggest customer, has returned millions of defective iPhones. The other claims that two failed bombing attempts in Taiwan were linked to the perpetrator’s alleged grudge against Hon Hai chairman Terry Gou.

The Apple story is likely to have the widest audience, since the Cupertino company is due to report quarterly earnings on Tuesday. The China Business Journal, citing an anonymous Hon Hai executive, said that Apple returned five million iPhone handsets ”because they either were not functioning well or did not meet Apple’s standards in terms of appearance.” Hon Hai spokesman Simon Hsing refuted those figures in the China Business Journal report.

Apple accounts for more than half of Hon Hai’s revenues. When Apple launched the iPhone 5 last year, tighter quality controls reportedly resulted in skirmishes at Foxconn factories and widespread employee discontent, though these had no direct effect on Apple.

It was a busy few days for Hsing: On Friday he filed a lawsuit against Taiwan’s United Daily News paper for its report that a man named Hu Tsung-hsien and an accomplice planted bombs on both a high-speed train and outside the office of a Kuomintang Party legislator, where Gou was scheduled to visit later that day, allegedly because Hu held a grudge from having lost a lawsuit against the Hon Hai chairman. Hsing said Apr. 21 that Hu has never been involved in litigation with the Hon Hai chairman.

Hu admitted to making the devices, but contended that they would not have exploded, saying they were only intended to scare the public.