According to a new note from analyst Ming-Chi Kuo, Apple is looking to lower component prices from its suppliers for the upcoming iPhone 12 series to offset the additional cost of new 5G technology. The idea is of course to contain the final price for customers.
The battery sacrificed on the iPhone 12
Kuo says adopting 5G Sub-6GHz-style technology costs Apple $ 75-85 per unit, while millimeter-wave 5G technology (for iPhone 12 Pro ) will cost Apple an additional $ 125- $ 135 . The firm therefore seeks to reduce costs wherever it can.
While Apple has generally exerted “higher negotiating pressure” on its suppliers, the “battery” part is the most exposed part according to Kuo. He thinks vendors will see Apple’s big cost reduction as the company reportedly requested a simpler, smaller design with fewer layers. The iPhone 12’s hard and soft hybrid battery is reportedly 40-50% cheaper than the equivalent of the iPhone 11 series.
Customers can therefore expect a small loss of battery life on future iPhones, unless the A14 chip etched in 5nm is so efficient that it compensates for the shrinking of the battery. Which is quite possible.
And for the next version of the Apple smartphone, Kuo says the manufacturer will push the limits even further with the “iPhone 12s” range in 2021, adopting a purely flexible design that will further reduce the cost by 30 to 40% more per compared to the price of the iPhone 12 card.
At the same time, Apple has also lowered the prices of its PCB vendors for the AirPods 2, with decreases of 25-35% since the first half of the year. All this in view of the AirPods 3 which will integrate part of the design of the AirPods Pro but at a lower cost.