In a brand new investors note today, Apple analyst Ming-Chi Kuo reports that despite the inclusion of 5G technology, Apple will not increase the price of the iPhone 12 lineup in comparison to the iPhone 11.
Kuo says that the iPhone 12’s average price will be 40-50% lower than the iPhone 11. Apple will accomplish this in two ways. Firstly, it will “aggressively downgrade its component specifications” without a compromise on the front-end user experience. And second, Apple will increase pressure on its suppliers to cut prices and reduce/change the component specification to save long-term costs.
5G technology in the iPhone 12 will however increase the production cost of the device, with sub-6 technology costing $75-$85 per unit, and mmWave costing $125-$135. Kuo says that in general Apple is aggressively placing pressure on suppliers, especially Qualcomm and Unitech to lower costs, with both expecting tough business in the remainder of 2020, and the start of 2021.
Additionally, in the note seen by Apple Terminal, Kuo says that an iPhone coming in the 2nd half of 2021, which Kuo dubs the “iPhone 12s” will be 30%-40% cheaper than the iPhone 12 thanks to “reduced numbers in layers” and a redesigned battery board.