Here's why the iPhone 12 costs 21% more than the iPhone 11

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Here's why the iPhone 12 costs 21% more than the iPhone 11
BUSINESSINSIDER
New Delhi, As you hold the new iPhone 12, do you realise why the new Apple device is costlier than the previous version? According to an in-depth analysis, the blended materials cost for iPhone 12 with 128GB NAND flash is nearly $415, a 21% increase over the iPhone 11.

In the iPhone 12, Apple's self-designed components including the A14 bionic, PMIC, Audio and UWB chip make up over 16.7% of the overall BoM (bill of materials) cost.

"The shift from LCD to OLED in the iPhone 12 is a big jump, resulting in an over $23 cost increase," said Ethan Qi, research analyst.

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"Cost increases are also driven by 5G-related components, with components like 5G modem, transceiver and RF front-end system collectively contributing a $34 increase," Ethan informed in a report on Tuesday.

In India, iPhone 12 in 64GB, 128GB, and 256GB models in blue, green, black, white and (PRODUCT) RED starts at ₹79,900.

On the other hand, the iPhone 11 (64GB) started from ₹64,900 in India.

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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%.

"Application processor, 5G baseband, display and 5G RF components represent the major areas of the cost increase," Ethan noted.

The new generation of Apple mobile processors, the A14 bionic, contains a whopping 11.8 billion transistors, up 39% from the A13's 8.5 billion units.

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This provides significant performance improvements in aspects of CPU, GPU and Neural Engine.

"Given the much higher 5nm wafer cost (nearly double that for 7nm), the application processor alone is estimated to introduce a cost increase of over $17," the analysis found.

"Apple's self-designed components including the A14, PMIC, Audio and UWB chip make up over 16.7% of the overall BoM cost".

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Apple has upgraded the display of its base models to OLED, which supports high dynamic range and higher peak brightness.

From the cost perspective, the shift from LCD to OLED in the iPhone 12 is a big jump, resulting in an over $23 cost increase.

"Both Samsung Display and LG Display are set to supply more panels to Apple," Ethan informed.

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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 report mentioned.


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