Report Says iPhone 12 Is Significantly More Pricey to Build Than iPhone 11
Last updated June 16, 2021
- The standard iPhone 12 costs about one fifth more to make than the standard iPhone 11.
- There are several reasons for that, including OLED displays and 5G connectivity tech.
- The BoM of the iPhone 13 may be even higher, as Apple is having trouble finding multiple display suppliers.
A Counterpoint report claims that iPhone 12 costs Apple a whopping 21% more to build than what is required for the iPhone 11, comparing similar baseline models. Considering that the price tag didn’t have any dramatic changes, Apple absorbed the difference
Of course, there’s also no charger in iPhone 12’s box, and that feels like a more justified move now. The cost of the box contents shouldn’t be more than $4.2 according to the report, though.
To break down the costs, Apple’s internally-designed components like the A14 Bionic chip, PMIC, Audio, and UWB chip make up just 16.7% of the overall device cost. The adoption of 5G, which forced Apple to knock on the door of Qualcomm, incurred an additional cost of $34.
Finally, the entire range now uses OLED panels, whereas the base iPhone 11 was using LCD. This display type change increased the cost by about $23.
In total, the new 128GB iPhone 12 should cost Apple around $431, which is $72.5 above the BoM cost of the iPhone 11. Counterpoint also accounts for some cost savings by simplifying the RF design, which should be around $27. So the price increase compared to the previous model is between 18% and 21%, which is very significant in both cases.
Apple has managed to diversify the supply sources for iPhone 12, which is always good both in terms of production rates and costs. However, for iPhone 13 and the ProMotion display, these plans are rumored to be pending disruption.
Reportedly, BOE and LG cannot produce OLED panels at the quality standards that meet Apple’s levels in the production volumes required, so the American consumer tech giant will have to rely on Samsung for the entire hog. If that happens, the bill of materials for iPhone 13 will push the total figure even higher.
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