Apple Ramps Up Monthly Production Capacity To 3.2 million Units

Foxconn, the Taiwanese OEM which is building Apple's iPhone, is supposedly building iPhones at the rate of 800,000 units per week, (that's 4 iphones every 3 seconds).

Michael Arrington from Techcrunch reported that a source close to Apple says that they are running above full capacity which may cause a few quality problems especially if this rate is to be sustained for a long period.

There have already been reports of iPhone 3G being particularly prone to cracks as reported by Ars Technica.

If this is confirmed, this would mean that Apple should be able to produce 40 million iPhones annually, helping it easily break its target for the whole of 2008.

More importantly, it will cement iPhone as one of the biggest smartphone manufacturers. Nokia is shipping around 550 million Phones annually with Samsung selling roughly a third of that amount.

A 40 million iPhone target would mean that Apple would be selling half the number of phones LG electronics sold in 2007, quite a feat for a company which started selling phones less than a year ago.

And none will have the kind of ARPU (Average Revenue Per User) or Gross margin that Apple currently enjoys with the iPhone.