According to Counterpoint, the iPhone 12 is substantially more expensive to manufacture than its successor, the iPhone 11. The information is based on a individual cost analysis of the components that are part of the new phone and it offers us an interesting perspective on costs, margins, R&D and other variables in the final price of our favorite phones.
More components and higher price
Counterpoint Analysis estimates the cost of the different components for the US version of the iPhone 12 to be $ 431. An increase of 26% compared to the iPhone 11 and that is justified, to a large extent, by the 5G antenna and the mmWave module.
Producing a 128GB iPhone 12 mmWave (millimeter wave) smartphone will cost Apple up to $ 431, 26% more than the iPhone 11, according to Counterpoint’s latest component research practice BOM analysis. Despite the savings of more than $ 27 due to the simplified RF design, the BOM cost of the sub-6GHz model for foreign markets still increases by 18%.
Assuming a total of 38% for iPhones with mmWave, the mixed material cost for the iPhone 12 with 128GB NAND flash is nearly $ 415, a 21% increase over its predecessor. The 5G processor, display and RF components represent the main areas of cost increase.
The cost of the A14 also represents an increase. According to the data we have, this component alone increases about $ 17 compared to the previous version, the A13. The move from LCE to OLED for the display panel represents, for its part, an extra $ 23 per unit.
It is clear that the components that make up an iPhone are not cheap. And in addition to these 431 dollars we must add the cost of assembly and logistics, costs that accompany other something more abstract such as marketing or R&D.
In any case, it is clear that making an iPhone, especially at the scale at which Apple produces them, is an exercise in balances, balance and margins that allow such a successful product to produce a sufficient margin and at the same time have a attractive price for all. A challenge.