The production of the iPhone 12 cost Apple 21 percent more than the iPhone 11. According to a recent report from Counterpoint Research, the bill of materials for the new iPhone 12 is $ 431. This is due to the newer parts from Apple that have been incorporated into the phone, including the 5G components and the new A14 Bionic chipset.
“Assuming a 38% mmWave mix, the mixed material cost for the iPhone 12 with 128GB of NAND flash is nearly $ 415, a 21% increase over its predecessor. Application processor, 5G baseband, display and 5G RF components are the main areas of cost increase, ”the report said.
Why is the new iPhone so expensive to manufacture?
The new Apple iPhone 12 can attribute its high bill of materials to a number of factors. One of them is the new OLED panels, which cost more than the LCD panel used on the iPhone 11. That alone adds up to a $ 23 cost increase for the new phone. Enabling 5G has also increased costs and brought Qualcomm back into the equation. The American chipset manufacturer has provided the paired transceivers and discrete RF components for both sub-6 GHz and mmWave versions of the new iPhone 12 series. “Our analysis shows that the combined cost increase from the RF subsystem is approximately $ 19,” the report said.
The Apple A14 Bionic chipset is also the company’s first 5nm chip. Compared to the A13 of its predecessor, the new chipset has 11.8 billion transistors, 39% more. The report suggests that the new chipset add another $ 17 to the bill of materials. It is also mentioned that “our analysis also indicates that Apple’s self-designed components, including the A14, PMIC, audio and UWB chip, account for over 16.7% of the total BoM cost.”
Apple has diversified its sources of supply
The iPhone 12 sources its various components from a number of companies. This also puts a strain on the telephone’s entire parts list. The report mentions that Apple sources its memory components from Samsung and KIOXIA (Toshiba), but the LPDDR4X RAM from SK Hynix and Micron. While Sony, LG and Sharp are supplying the camera components for the new phone, NXP and Broadcom are supplying the components necessary for wireless connections and touch controls.
The report adds that Cirrus Logic, Goertek, Knowles and AAC are supplying the audio design for the new iPhone. In the meantime, the power and battery management ICs will be supplied by TI and ST. The new iPhone also uses the SiP (System in Package) from ASE and USI. This is used to miniaturize the design and develop packaging for the smartphone.