This type of testing sounds like a huge pain, but makes a big difference for customer satisfaction to the point where a company can differentiate themselves by doing it.
A company called Yongnuo makes some fantastic speedlights (photographic flashes), which are inexpensive alternatives to the fully-automatic Canon/Nikon standards for strobist photogs. Think $40 instead of $400.
The trade-off is that many of them arrive defective, they are known for not having good QA. There are sellers on ebay who make it a point to test every one before shipping. Guess who I chose to buy mine from? Not a bad way to make a profit and stand out on an otherwise low-margin item.
Yes, if the customers are doing hardware testing it's a disaster for satisfaction, and you also have the cost of repair and shipping and recalls. It's very interesting trade off wise. When I worked in the semiconductor industry, there was a fail rate of something like 35% of chips cut from the wafer. Depending on the complexity and size of the chip relative to the wafer, that rate could go up to 90%, or down to 10%. This is because of things outside of human ability to control, microscopic defects in the substrate for example, or a single dust particle that got into the clean room. These were tested on the full sized wafer and marked with dots and then after cutting the ones with dots are tossed out. Needless to say, it is utterly crucial that significant parts of the chip design must be solely for the purpose of being able to completely test functionality on-chip. This results then in 100% functioning of things that went out the door. I've never even seen a CPU that went to a customer that had a known defect at that stage, so the step of tossing away a large number is just part of manufacturing. However in the case of manufacturing boards overseas, it is definitely possible to increase field significantly. The units were just as testable over there as they are here in the US, without the trouble of unpacking and repacking the retail boxes. But for whatever reason reform of the foreign manufacturing plant simply was not happening and not something they were interested in, and management apparently felt that the trade offs involved made sense, including all the extra rework and testing.
One thought that has occurred to me though is that Apple is using much more poor quality manufacturing than they were years ago, and there is a high failure rate of Apple laptops. However, they have a warranty that covers fixing everything for 1 year and everyone sane knows to buy the extended 3 year since there's something like a 1 in 4 chance you'll need it. So Apple has figured that they save enough making it in China that they can absorb the cost of fixing 25% of the ones where the customer bought AppleCare. These repairs are usually replacing the whole motherboard with spares that they buy in vast quantities for each and every model. This is all done very intentionally for sound economic reasons and customer satisfaction is very high despite the failures.
A company called Yongnuo makes some fantastic speedlights (photographic flashes), which are inexpensive alternatives to the fully-automatic Canon/Nikon standards for strobist photogs. Think $40 instead of $400.
The trade-off is that many of them arrive defective, they are known for not having good QA. There are sellers on ebay who make it a point to test every one before shipping. Guess who I chose to buy mine from? Not a bad way to make a profit and stand out on an otherwise low-margin item.