Foxconn again exposed to iPhone parts ‘resale incident’

According to Taiwanese media reports, Mr. X, a Taiwanese businessman, recently reported that there were “inside man” in the Foxconn factory in Zhengzhou to sell iPhone parts, and he had submitted evidence to Apple, which said in a reply that it had “zero tolerance” for such commercial unethical practices and would ask the authorities to scrutinise them.

When he passed the news to Taiwan media, Mr. X said: “Our team is already operating the electronic hardware scrap business, the factory’s production line is inevitably defective.” The normal scrap rate is around 3% to 5%, and after we get these defects, we resell them after secondary processing. ”

“Our team started with the iPhone 4S, starting with the acquisition of these bad products in Shenzhen through Hong Kong’s environmental protection companies and then reselling them to some parts manufacturers in the mainland, and from three years ago we skipped Hong Kong’s environmental manufacturers and picked up goods directly from Foxconn’s Zhengzhou plant through insiders. ”

Mr. X said he was able to break into Foxconn’s Zhengzhou plant because of an in-factory executive who then met other internal employees through him and was allowed to enter the plant to see goods before taking them.

He revealed that when he went to the Zhengzhou factory to see the goods, the factory staff will ask them to turn off their mobile phones, but Mr. X once took the opportunity to secretly film a video in the factory inspection. From a few seconds of the video can be seen, a stack board with ten cartons, outside as to how the two sides how to pick up goods? Mr. X defiantly said: “We finished the goods after the order, the next day called the truck, the two sides about in the factory outside the hidden private residential to pick up, after inspection, directly pay cash to the connector of the person, and then we sell these components to fixed cooperation of the dealer, and finally by these dealers sold to the whole mainland, but also indirectly sold to Taiwan.” ”

He cites the iPhone XR as an example of components mostly assembled at Foxconn’s Zhengzhou plant, with a yield of about 93%, or 7% of the products. According to the regulations, these bad goods must be destroyed, but his team has a way to get undestroyed bad goods, after simple sorting, can be turned into good goods resale profit.

“The iPhone’s rear panel is profitable and easy to handle, so we started working on this project three years ago, and the rear panels we got from Foxconn’s Zhengzhou plant included the iPhone 8 Series, the iPhone X Series, and the stainless steel midframe of the light iPhone X has been sold by us for 300,000 units.” Mr. X introduced.

Foxconn again exposed to iPhone parts 'resale incident'

Mr. X also said that factory employees would even intentionally damage good products in order to increase the number of defective products. “These are deliberate scratches on the back panel imperfections, because the factory can classify these back covers as bad, and sell them to us, and the scratches on the glass can be easily removed for fade-out and printing, at a cost of nt$150 (about $35). We buy at a cost of 450 yuan (about 150 yuan) per piece, but can sell for more than 1000 yuan (about 230 yuan), the profit is very high, almost buy a piece to make a profit. Mr. X said.

The idea of reporting to Apple came about because he had a holiday with Foxconn insiders, and when he returned to Taiwan, he complained to Hon Hai, Foxconn’s parent company, but did not get a response, then turned to Apple to report it, and received a response from Apple.

In an email to Apple, Mr. X wrote, “I spent a lot of time gathering evidence and arranged for secret agents to enter Foxconn, where many of the out-of-hand hand parts on the market have been resold over the past few years, seriously affecting Apple’s interests and losing nearly $3 billion a year.” ”

In response to the incident, Hon Hai, Foxconn’s parent company, recently said it had investigated the process and would never condone it.

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