Analyst Ming Chi Kuo is of the opinion that Apple is looking to put a “pricing squeeze” on component suppliers for the upcoming iPhone 12 lineup to help offset the increased costs for new 5G tech and also minimise the need to increase prices across the flagship lineup.
According to MacRumours, in a new research note, Kuo says that the adoption of Sub-6GHz 5G technology is going to increase Apple’s costs by $75–$85, while the millimeter wave technology will incur a $125–$135. Given these prices, the company is looking to cut costs on other components wherever it can.
Apple has been putting “higher bargaining pressure” on its suppliers, and Kuo believes the battery board is one area where suppliers will see the biggest cost trimming as the company is moving to a simpler and smaller design with fewer layers. A hybrid hard and soft battery board for the iPhone 12 will reportedly be 40–50% cheaper than the parts used in the iPhone 11 series.
Kuo says that Apple is going to push the envelope even more with the iPhone 12s lineup in 2021 by adopting a “purely softboard design” that can cut away an additional 30-40% of costs as compared to the price of the iPhone 12 board.
Kuo says that Apple has also been putting pressure on its circuit board suppliers for the AirPods, with “the average price of soft and hard boards in the AirPods 2 declining by 25–35% since the first half of the year”.
According to the analyst, Apple’s current suppliers will face even more issues when the AirPods 3 launch in the first half of 2021 and he reiterated his previous claims that the next-generation earphones will follow the AirPods Pro in adopting an integrated system-in-package (SiP) design rather than the surface-mount technology (SMT) found in the current AirPods 2.
Source: Hindustan Times
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