5.8-inch iPhone X successor to be ~10% cheaper to manufacture, according to report

The iPhone lineup for 2018 is looking to be composed of three new models, a 6.1-inch LCD iPhone, a successor to the existing 5.8-inch iPhone X and a new high-end 6.5-inch OLED ‘iPhone X Plus’.

Digitimes today reports that the new 5.8-inch iPhone will be significantly cheaper to manufacture, which could imply a drop from the $999 price point Apple established with iPhone X.

The report says that the new 5.8-inch iPhone will have a total bill of materials (the estimated cost of all components) more than 10% lower than the iPhone X had when it first launched. iPhone X BOM was estimated around $400.

Apple executives have decried bill of material estimates in the past, so these estimates need to be taken with some skepticism. Cost of raw parts is not the only factor in manufacturing either. However, it would make sense for the iPhone X to have higher supply side costs than a more iterative year, due to the ramp of new components already handled in the 2017 cycle.

The Digitimes analyst said Apple had mingled with the idea of a 5.8-inch LCD model but has since shelved plans for it. He goes on to claim that the 5.8-inch iPhone could be the cheapest model in the lineup, as Apple has been testing models with lower RAM specifications than the 6.1-inch LCD prototype phones.

Ultimately, pricing is marketing. Apple is the only one who controls that. They could bring the $999 price down, they could keep it the same and increase their own profit margins a little. The running theory up to now is that the 6.1-inch LCD iPhone would be the cheapest model, priced around $800. The 6.5-inch iPhone X Plus would become the new high-end flagship.

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