Foxconn could suffer up to $259 million due to substandard or dysfunctional issues of iPhone devices which was returned for repair.

At least 5 million of Apple iPhone devices was returned to Foxconn for complaints of malfunction and substandard product. According to China Business [Google Translation], Apple returned the devices to Foxconn and perhaps up to 8 million units are affected with either appearance or defective operation.

"Foxconn insiders who asked not to be named, told the China Business reported, quality is not qualified Apple phone even up to a total of 8 million," according to China Business.

Foxconn will suffer 200 yuan per device or $32 to correct each defective iPhone resulting to a total charge of 1.6 billion yuan or $259 million. The specific details about what kind of defects are not yet clear but Apple does not seem to be affected from major shortages of any of its current devices.

Foxconn stated that Apple's iPhone was "the most difficult device" to assemble according to Apple Insider. However, there are no reported issues of any iPhone 5 problems from Foxconn.

Issues of production problems with the upcoming next-generation iPhone 5s has been linked to this incident and possibly one of the main factors why Apple keeps on delaying the device.

"Apple has to work out how to prevent interference from the black and white coating material under the cover glass. Apple is the first to attempt this function and technology, and time is needed to find the right coating material, which will likely affect iPhone 5s shipments," according to the analyst Ming-Chi Kuo quoted by the Apple Insider.

iPhone 5 received multiple complaints regarding quality control issues after its launch, vulnerability to scratches and other problem with the device right out of the box. This will result for Apple to take two and a half months to achieve supply-demand balance for iPhone 5. Apple is also pursuing the most aggressive worldwide roll-out move.