Apple returned up to 8 million iPhones to Foxconn “due to appearance of substandard or dysfunctional problems.” This could cost Cupertino’s top manufacturer up to $1.6 billion, according to a report from China Business.

The report doesn’t mention specific problems with the handsets. Additionally, we don’t know which models were returned.

If the batch was made up of existing models, such as the iPhone 5 and iPhone 4S, this could eventually show up as a hole in Apple’s supply chain. However, if these defective models were in fact “iPhone 5S” models, Apple may be forced to delay the launch of its newest handset.

Foxconn reportedly began production of the iPhone 5S earlier this month. As of now, Apple is expected to announce the seventh-generation iPhone at the Worldwide Developers Conference in June.

Image courtesy of Flickr, Sam Beebe

This article originally published at AppAdvice here