A former Foxconn employee landed himself in hot water after Taiwanese officials indicted him for stealing 5,700 iPhones. He allegedly sold the units in China and has enriched himself by at least $1.5 million thereafter.
How The iPhone Theft Took Place
The suspect known only as Tsai was senior manager at a Foxconn factory located in Shenzhen. He reportedly instructed eight other accomplices to smuggle iPhone 5 and 5s units and the operation began in 2013. His activities went on undetected for two years.
The modus was quite simple. Tsai was connected to the facility's testing department and the stolen goods were actually made for testing and not for sale. The products are supposed to be reported as scrapped once tested. It is not immediately clear whether testing was actually conducted on the devices or not at all.
The theft was only discovered during a recent internal audit and the perpetrator was arrested and questioned early this year, according to Agence France-Presse. Tsai has since been released after posting bail.
The indictment involves breach of trust and Tsai could face a maximum of 10-year jail term if proven guilty. There is no word whether his accomplices will suffer the same fate.
Foxconn, Apple And Trump
Foxconn remains as one of Apple's main suppliers. When Cupertino, for example, got 4 million advanced orders for the iPhone 6 and 6 Plus immediately after their announcement, Foxconn had to ramp up production volume in order to meet the demand. By 2013, the company was already producing 500,000 iPhone handsets per day.
Tsai's indictment could possibly cast a cloud over Foxconn's relationship with Apple. While the incident has no direct bearing on the actual products delivered, it is a public relation problem. Foxconn has already sustained scandals regarding employee misconduct as well as labor disputes. The company has also been accused of overworking its workforce, which allegedly has led to several cases of suicides.
These developments will certainly not help the Taiwanese company amid mounting pressure on Apple to reduce reliance on Chinese suppliers after Donald Trump got elected. Trump has reportedly offered the company a number of incentives in order to manufacture its products in the United States.
It is helpful to remember that Apple remains as one of Foxconn's largest customers. If the company decides pull out from China, Foxconn stands to lose a huge chunk of its revenue. At this point, it employs around 1.3 million employees.
Apple has not released any statement regarding the iPhone theft and Tsai's indictment.