A16 Chip in iPhone 14 Pro Reportedly Costs Apple Over Twice as Much as A15 Chip

[1557750]

Apple has insane margins. They can eat the cost.

I’m aware of their margins. Whether they can afford it or not… Why “eat the cost” throwing newer chips in the lower end devices that don’t demand it?

Million dollar company or trillion dollar company; there’d be a lot less companies around if they just ate costs to make everyone happy.

I’m curious to see ALL the reviews of users complaining about sluggish 14/14 Plus performance due to the A15 in it.

👊🙄👍

 

[_Spinn_]

That's a huge price increase! Next year will probably be worse. This explains why they didn't put the A16 in the non-Pros this year.

 

[gund1234]

I can't see that the phone needs a faster chip. My guess is the only reason for using the new chip is the energy saving.

agree, but most people want fastest processor, see the reception of iPhone 14, people are not happy becasue Apple used A15 chip with minor improvements.
i think every one should focus on battery life.

 

[gund1234]

I do think running apps and overall use on the 14 pro is incrementally more smoother, but I wouldn't say it's significantly different from the 13 pro. I read an article that says that the A16 Chips is actually just a more advanced 5nm process and not a true 4nm process like Apple was advertising. But what would be the ultimate version of the chip with the current technology, a 1nm process?

there are so many chips in A16 SOC, and not all of them need to be 4 nm, so they pick which chips need to be 4 nm and which chips need to be 5 nm.
there wont be any SOC that will have 5 nm nodes in every chip/processor, this will never happen.

 

[gund1234]

The newer more expensive chip adds to COGS (cost of goods sold). And Apple will simply apply their roughly +40% GPM to the cost. It won't hurt Apple's profit margin.

Share holders would beg to differ with you, they want every penny.

 

[dennis laska]

I need the fast chip so I can get my cats 48mp photos faster online.

 

[Realityck]

Share holders would beg to differ with you, they want every penny.

Since when do common stock share holders see every little penny from Apple?

 

[gund1234]

Over time apps need more power to run also. Try running a current app on one of the 1st 2 iPhones made… it won’t happen.

App developers will not optimize for power consumption as long as app runs, why would they spend money on optimization.
if Apple gives them 5 Ghz processor on an iPhone app developers will use all that power doesn't matter if it is needed or not.

 

[sdf]

I’ll bet that it was more expensive, but no where near 20% more expensive.
If it actually were that expensive, then other component costs must have come down enough to offset this. Apple is not going to suck up that much margin loss.

They have in the past over exchange rate changes, so I'd be cautious about being so sure.

 

[gund1234]

What is truly amazing is that the original Macintosh CPU was 3500nm. Now we are debating if an Apple CPU is 4nm or 5nm.

Most of us probably don't know anything about 4 nm and 5 nm, but we all want 4 nm.

 

[citysnaps]

Share holders would beg to differ with you, they want every penny.

That makes no sense. Again, Apple will not be losing profit margin; ie GPM. It will still be around 40% of COGS. And to maintain that, prices customers pay will be increased to to cover that.

 

[Schizoid]

Think I’ll wait for the 900 picometre process in the A29 cybotronic

 

[Aston441]

It’s a great chip. The 14 Pro Max is blazing fast compared to my 11 Pro Max. I can’t believe how quick it is.

So it's as fast as your 11P was when you first bought it, before the iOS updates?

 

[mikethemartian]

Since when do common stock share holders see every little penny from Apple?

Well shareholders collectively own the company so it is embedded in the market value.

 

[slplss]

I do think running apps and overall use on the 14 pro is incrementally more smoother, but not significantly different from the 13 pro. I read an article that said that the A16 Chips is actually just a more advanced 5nm process and not a true 4nm process like Apple was advertising. But what would be the ultimate version of the chip with the current technology, a 1nm process?

I’ll wait when the process measurement goes down to pikometers 🧐.

 

[Realityck]

Well shareholders collectively own the company so it is embedded in the market value.

You should think of it as more of being an investor than a part owner of Apple.

 

[scrapesleon]

Yeah inflation affects everything moving on

 

[FrozenDarkness]

i think anybody of sound mind will know no company, especially not apple, will swallow $50 in production costs. It's either possible that prices have come down elsewhere or that this article is just not factual. i'm leaning towards the latter. no company will accept that price increase on a single component.

 

[iBreatheApple]

Perhaps their shrunken margin can be offset by the time they duped us by saying we all had 20 bricks laying around the house and they are bad for the environment so stopped including them and then immediately transitioned to USB-C therefore our 20 bricks are actually useless for new devices. Still salty about that BS. have never fast charged because it doesn’t seem rationale to spend money when I do in fact have 20 slow ones laying around.

 

[JPack]

i think anybody of sound mind will know no company, especially not apple, will swallow $50 in production costs. It's either possible that prices have come down elsewhere or that this article is just not factual. i'm leaning towards the latter. no company will accept that price increase on a single component.

Anybody of sound mind knows demand isn't inelastic given global economic conditions.

How does Apple not "accept" such a price increase when TSMC is the world's sole leading edge semi foundry? Does Tim Cook have a secret N4 fab in his garage?

 

[genovelle]

I’ll bet that it was more expensive, but no where near 20% more expensive.
If it actually were that expensive, then other component costs must have come down enough to offset this. Apple is not going to suck up that much margin loss.

There are a lot of chips in an iPhone. Even if the others stayed the same the others would moderate the price.

 

[FrozenDarkness]

Anybody of sound mind knows demand isn't inelastic given global economic conditions.

How does Apple not "accept" such a price increase when TSMC is the world's sole leading edge semi foundry? Does Tim Cook have a secret N4 fab in his garage?

It goes both ways. Who is TSMC selling this excess capacity to? Who is selling hundreds of millions of devices?

Also, there are other ways to lower costs. Apple could've just overclocked an existing 5nm chip and not talked about it.

It goes without saying a $50 increase is nontrivial to any production cost.

 

[spcopsmac21]

Apple's new A16 Bionic chip in the iPhone 14 Pro and iPhone 14 Pro Max costs $110 to produce, making it over 2.4× as costly as the A15 chip in iPhone 13 Pro models released last year, according to a Nikkei Asia report.

The A16's higher cost is likely due in part to the chip being manufactured based on TSMC's 4nm process, while the A15 is a 5nm chip. iPhone chips could continue to increase in price as miniaturization continues, with rumors suggesting the A17 chip in iPhone 15 Pro models will be based on TSMC's 3nm process, and a DigiTimes report this week claiming that TSMC will begin volume production of 2nm chips in 2025.

Geekbench 5 benchmark results indicate the A16 chip delivers around 15% to 17% faster multi-core performance compared to the A15 chip. Only the iPhone 14 Pro and iPhone 14 Pro Max are equipped with the A16 chip, while the iPhone 14 and iPhone 14 Plus have the same A15 chip with a five-core GPU as found in iPhone 13 Pro models.

In collaboration with Fomalhaut Techno Solutions, a Japanese research firm specialized in reverse engineering and bill-of-materials analysis, Nikkei found that average production costs have increased about 20% across the iPhone 14, iPhone 14 Pro, and iPhone 14 Pro Max compared to the equivalent previous-generation models.

The report claims that given Apple did not raise prices for its latest iPhone models in the U.S. and some other markets, the higher production costs mean that the company's profit margins have "likely shrunk," but prices did increase in key markets like the U.K., Australia, and Japan amid a strong U.S. dollar relative to other currencies.

Article Link: A16 Chip in iPhone 14 Pro Reportedly Costs Apple Over Twice as Much as A15 Chip

So $2.35 over $1.17. Poor apple

 

[spcopsmac21]

Over time apps need more power to run also. Try running a current app on one of the 1st 2 iPhones made… it won’t happen.

Because the code didn’t exist to execute the applications…
Lots of new programs are soft locked out of older processors for planed obslicence. Processors and GPU developerd over the last decade are nearly identical to what’s sold today.

The new M series chips will have massive issues in the future. Their longevity is doomed. Integrating everything into one SOC is going to help apple drive sales.
We have PowerBooks still working just as good as they did the day they were built. If one component fails it’s easily replaced.
But with apples design we DO get incredible gains. At the cost of longevity.

 

[spcopsmac21]

Why don’t they put the M2 into the iPhone Pro?

Because apple wants to keep the mobile gap as long as possible. New M iPads are technically capable of high end laptop speeds and raw power. But it will be a cold day in hell when apple allows a full blown version of macOS on a device not a laptop or desktop computer.
They would loose so much money.
Once the M series is integrated into an iPhone people will want the ability to dock it and use macOS. It’s the future. But when they eventually happens apple will loose a significant portion of its revenue stream. So the idea is to slowly move towards that. Making people think they need multiple devices to accomplish tasks. Keeping investors happy, showing growth and keeping everyone on the edge of their seats every September.