iPhone 5 "complicated and difficult to assemble": Supplies may be short

Apple's incoming fifth-gen iPhone is "complicated and difficult to assemble" according to sources at Foxconn, with the potential for that design trickiness to impact supplies of the much-anticipated smartphone when it launches in Q3 this year. According to theĀ WSJ's tipsters, the iPhone 5 will indeed be thinner and lighter than the existing iPhone 4, as well as use an 8-megapixel camera as previously suggested; however, they also claim that Apple's ambitious targets of 25m iPhone units by the end of 2011 may be impacted by Hon Hai subsidiary Foxconn's current low yield rates.

"Apple's sales estimates of the new iPhone is quite aggressive" one anonymous supplier informed the paper, going on to suggest that the Cupertino company said "to prepare to help the company meet its goal of 25 million units by the end of the year. However, "the initial production volume will be a few million units... we were told to ship the components to assembler Hon Hai in August" they continued, echoing reports from late last week about the state of Foxconn's order book.

Even Hon Hai's chairman, Terry Gou, has admitted that production difficulties have held the company back. "The touch-screen devices are so thin. It's really difficult to install so many components into the iPhones and iPads," he suggested at the company's annual general meeting last month. "We hope to raise the yield rate and volume in the second half which will help improve our gross margin" he continued.

There's also corroboration for the iPhone 5 using Qualcomm wireless baseband chips, which are expected to be used to make the fifth-gen smartphone a so-called World Phone capable of using either GSM or CDMA networks. Earlier this week, rumors suggested Pegatron had also received next-gen iPhone orders for a handset markedly similar to the current CDMA model it produces for Apple. That led to suggestions that Apple might be bisecting the iPhone range into two models, a basic evolution of the current iPhone 4, perhaps the iPhone 4S, with Pegatron producing it, and then a high-range iPhone 5.