Apple is facing increased expenses for the production of its upcoming “iPhone 12” lineup, mostly due to the new handsets’ inclusion of 5G technology. Apple industry analyst Ming-Chi Kuo says this has led the iPhone maker to put “higher bargaining pressure” on its suppliers to keep other costs down.
MacRumors reports that Kup says Sub-6GHz 5G technology will increase Apple’s costs by $75–$85, while millimeter wave technology will incur a $125–$135 cost for Apple, which means the Cupertino company is cutting costs on other components wherever else it can.
Kuo says the iPhone’s battery board is one area where Apple can push for the largest cost trimming, as Apple is looking to go for a simpler and smaller design with fewer layers. The hybrid hard and soft battery board for the iPhone 12 will reportedly be 40–50% cheaper than the equivalent part in the iPhone 11 series. While this component is likely a small contributor to Apple’s overall iPhone production costs, every little bit helps.
Kuo also says Apple will push the cost-lowering envelope even more with the “iPhone 12s” lineup in 2021, adopting a purely soft board design that will shave off an additional 30–40% compared to the iPhone 12 board price.
Kuo also mentions that Apple is putting pressure on its AirPods circuit board suppliers, with the average price of soft and hard boards in the AirPods 2 declining by 25–35% since the first half of the year. Kuo says Apple suppliers will face even more price pressure when AirPods 3 production begins late this year or early 2021.