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Report: iPhone 12 is 21% More Expensive to Make Than iPhone 11

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Apple's iPhone 12 is around a fifth more costly to make than an equivalent iPhone 11, based on an analysis of the blended materials by Counterpoint's component research practice.

iPhone-12-Layout.jpg
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.
Click to expand...
According to the report, Apple's self-designed components including the A14 Bionic chip and Ultra Wideband (UWB) chip make up over 16.7% of the overall bill of materials cost, while the shift from LCD to OLED in the iPhone 12 results in an over $23 cost increase.

The ‌iPhone 12 Pro‌ and ‌iPhone 12 Pro Max‌ start at $999 and $1,099, respectively, which are the same prices that the iPhone 11 Pro and iPhone 11 Pro Max were when they launched in 2019. However, the 256GB and 512GB storage options for both ‌iPhone 12 Pro‌ models are $50 cheaper than their predecessors were at those capacities. Meanwhile the ‌iPhone 12‌ starts at $799, and the ‌iPhone 12 mini‌ starts at a more affordable $699 entry point – although sales of the latter device have reportedly disappointed Apple so far.

Apple is believed to have put a pricing squeeze on component suppliers to help offset increased costs for the new 5G technology and minimize the need for price increases. In addition, Apple is also said to have adopted a hybrid hard and soft battery board for the ‌iPhone 12‌ that is reportedly 40–50% cheaper than the equivalent part in the iPhone 11 series.

According to Apple analyst Ming-Chi Kuo, Apple will push the envelope even more with the iPhone 13 lineup this year, adopting a purely soft board design that will shave off an additional 30–40% compared to the ‌iPhone 12‌ board price.

Article Link: Report: iPhone 12 is 21% More Expensive to Make Than iPhone 11
 
Article Link
https://www.macrumors.com/2021/01/07/iphone-12-fifth-costlier-than-iphone-11/
gsmornot said:
I can believe it. My iPhone 12 Pro Max feels more expensive/robust than my iPhone 11 Pro Max did. The 11 did not feel cheap, the 12 just feels nicer. I didn’t realize how much I really liked my 4-5 series.
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iPhone 11 to 12, not 11 Pro Max to 12 Pro Max.

And you probably only think it feels nicer because of the squared edges, because the housing of both are made from the same materials.
 
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Star Brood said:
I'd love it if they ditched the 5G and released a sub-$500 OLED iPhone.
Click to expand...
I think once Apple put a next gen cellular, any newer iPhones after that will have it. Eg. LTE. Anything after the iPhone 5 have LTE. So I doubt that Apple would do a non-5G iPhone from now on.

I think we will have to wait until 2022 to see if Apple will keep the 12 mini when they release iPhone 14. If they do, in theory it will be $499 (from $699 to $599 and then $499). In theory, of course.
 
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Username32123 said:
I have a 12 Pro and the first thing I did on day 1 was disable 5G. 4G speeds are more than sufficient for my needs and I’d rather increased battery life over that data speed increase. Not to mention lack of consistent coverage for 5G.
Click to expand...
Apple's problem is that they were stuck with the older Qualcomm X55 modem for the iPhone 12 instead of the newer X60 modem. That's natural for the bleeding edge tech. The iPhone 5, the first LTE iPhone, has a pathetic set of LTE bands.

The X60 modem will give faster 5G since it can aggregate both mmwave and sub-6 bands. The X55 can only connect to either mmwave or sub-6.
 
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yet, the price doesn‘t reflect a 21% difference. the iphone 11 started at €799, and so does the iphone 12 - and apple won‘t be selling them at a loss, so we‘re probably looking at at least 30% profit margin. not bad.
 
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If I remember correctly, the first iPhone had a cost of approximately 160$.

So surprising that the cost of the "basic" iPhone has become 3 times higher in 13 years.
 
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In another words, they're preparing you for a price increase. Let's see how much they will price it the following year. I don't believe it cost Apple up to $431 and yet the price still stayed the same as the iPhone 11 while Apple made a huge profit.
 
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swingerofbirch said:
What exactly do people do on their phones that they want 5G?

To me it seems completely unnecessary (not to mention unbaked at this point), but maybe there's a use case I haven't considered.
Click to expand...
Depending on carrier, 5G is using the same basic frequencies as LTE. Some use ESS and some just carve out part of LTE. Not using it limit potentially the service in some areas. mmWave might use more battery but low band has had no effect on battery performance. Mid band in a year or so will be the sweet spot. I wonder how many left LTE off because 3G was plenty.
 
I used to be able to see Apple's internal cost for these devices (a long time ago) and what these "analysts" would estimate was never even close to the real cost.

Also, the real cost would start off much higher at launch, and decrease over the course of the following year. For example, It might start at $320 and drop to $240 after 6 months.

The other big unknown was royalties/licenseing, and I was never sure if those costs were included in what I was seeing. Probably not.
 
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MacRumors said:


Apple's iPhone 12 is around a fifth more costly to make than an equivalent iPhone 11, based on an analysis of the blended materials by Counterpoint's component research practice.

iPhone-12-Layout.jpg
According to the report, Apple's self-designed components including the A14 Bionic chip and Ultra Wideband (UWB) chip make up over 16.7% of the overall bill of materials cost, while the shift from LCD to OLED in the iPhone 12 results in an over $23 cost increase.

The ‌iPhone 12 Pro‌ and ‌iPhone 12 Pro Max‌ start at $999 and $1,099, respectively, which are the same prices that the iPhone 11 Pro and iPhone 11 Pro Max were when they launched in 2019. However, the 256GB and 512GB storage options for both ‌iPhone 12 Pro‌ models are $50 cheaper than their predecessors were at those capacities. Meanwhile the ‌iPhone 12‌ starts at $799, and the ‌iPhone 12 mini‌ starts at a more affordable $699 entry point – although sales of the latter device have reportedly disappointed Apple so far.

Apple is believed to have put a pricing squeeze on component suppliers to help offset increased costs for the new 5G technology and minimize the need for price increases. In addition, Apple is also said to have adopted a hybrid hard and soft battery board for the ‌iPhone 12‌ that is reportedly 40–50% cheaper than the equivalent part in the iPhone 11 series.

According to Apple analyst Ming-Chi Kuo, Apple will push the envelope even more with the iPhone 13 lineup this year, adopting a purely soft board design that will shave off an additional 30–40% compared to the ‌iPhone 12‌ board price.

Article Link: Report: iPhone 12 is 21% More Expensive to Make Than iPhone 11
Click to expand...
The move to eliminate the charging brick seems even more justified with this information, as guesstimated as it may be.
 
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ian87w said:
I think once Apple put a next gen cellular, any newer iPhones after that will have it. Eg. LTE. Anything after the iPhone 5 have LTE. So I doubt that Apple would do a non-5G iPhone from now on.

I think we will have to wait until 2022 to see if Apple will keep the 12 mini when they release iPhone 14. If they do, in theory it will be $499 (from $699 to $599 and then $499). In theory, of course.
Click to expand...
Apple have released stripped-down versions of their products for countries like India and China in the past, but I think the 12 Mini missed the sweet spot in pricing because of the inclusion of 5G. Prices for iPhones in Europe are absurd and the price of data is also very expensive (at least in Germany) so there would be no benefit to faster data transmission.
 
This makes sense, and one can now understand why Apple is charging $829 for the iPhone 12 vs $699 for the iPhone 11. The great news is if you don't care for OLED, A14 or 5G, you can still purchase the iPhone 11 for $599 now.
 
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MoreRumors? said:
Let's see how much they will price it the following year. I don't believe it cost Apple up to $431 and yet the price still stayed the same as the iPhone 11
Click to expand...
The price did not stay the same as the iPhone 11. Unlocked Sim Free iPhone 12 is $130 more than the previous same version of iPhone 11.
 
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