Big cost increases include the OLED display, 5G, and the A14 processor.
What you need to know
- A Counterpoint report says Apple’s iPhone 12 is around 21% more expensive to manufacture compared to the iPhone 11.
- That’s thanks to upgrades like 5G and an OLED display.
A new Counterpoint report says that Apple’s iPhone 12 is around 21% more expensive to make in terms of blended materials compared to the iPhone 11.
From the report:
Producing a 128GB iPhone 12 mmWave (millimeter-wave) smartphone will cost Apple up to $431, 26% higher compared to the iPhone 11, according to the latest bill of materials (BoM) analysis by Counterpoint’s component research practice. Despite over $27 cost savings due to the simplified RF design, the BoM cost of the sub-6GHz-only model for overseas markets still increased by 18%.
Assuming a 38% mmWave mix, the blended materials cost for the iPhone 12 with 128GB NAND flash is nearly $415, a 21% increase over its predecessor. Application processor, 5G baseband, display and 5G RF components represent the major areas of the cost increase.
As you might expect, a few key new features have really driven up the cost of making the iPhone 12. The addition of Apple’s new A14 chip accounts for 16.7% percent of the overall BoM cost.
Upgrading the display of the iPhone 12 to OLED compared to the LCD in the iPhone 11 also makes for a big jump of $23. Another noticeable cost increase is 5G:
The iPhone 12 has been equipped with more RF components to support the 5G-related spectrum. Our analysis shows the blended cost increase from the RF subsystem is around $19. Besides Qualcomm, other major content gainers are Skyworks, MURATA and Avago.
The news follows reports that the aforementioned Murata expects demand for 5G devices to skyrocket in 2021 to at least 500 million.