In the latest TF Securities report from Ming-Chi Kuo, the Apple analyst estimates the cost of adding 5G to this year’s iPhone. Kuo believes it will cost Apple about $75 per unit for sub-6GHz 5G support, and up to $125 for millimeter wave 5G.
Kuo does not expect Apple to pass on all of the cost increases to the consumer sale price of the iPhone 12. That means Apple is looking to offset 5G component costs by looking for cost savings elsewhere in the phone. Kuo names the battery printed circuit board as one area where Apple is downgrading its specifications.
Kuo says that the cost cuts on internal parts will have almost no noticeable effect on user experience. Apple is also aggressively applying price pressure on its suppliers to source the best deals for components.
One area where Apple appears to be saving money is with the bundled accessories. The iPhone 12 lineup is not expected to include headphones or a power brick in the box.
Many Android phone manufacturers have had to rise prices in order to accommodate the costs of adding 5G to their models. If Apple can keep iPhone prices relatively stable, whilst adding next-generation cellular networking, that will help it compete in the smartphone market amidst weaker macroeconomic trends as a result of the pandemic.
The iPhone 12 lineup will consist of four separate models, all featuring OLED screen technology for the first time. The form factor will harken back to the iPhone 5 with flat, squared off sides similar to the 2020 iPad Pro design. There will be a new smaller 5.4-inch screen size, two 6.1-inch models and a new 6.7-inch ‘Max’ high-end model. Apple has publicly confirmed a slight delay to the typical release schedule, meaning that the iPhone 12 will launch this year in October.