2020 iPhones Could Cost More Due to 5G, Higher Component Costs

Reliable Apple analyst Ming-Chi Kuo believes that Apple will have to increase the size of the logic board on the 2020 iPhones by 10% to make space for the 5G modem and other new technologies. This will lead to a 35% increase in component costs for the company.

Apart from 5G, the 2020 iPhones will feature a new circuit related to the 5G antenna. This will take up more space than the existing antenna setup and 4G modem used by Apple on its 2019 iPhone lineup. The 10% additional increase in logic board size will lead to an increase in the logic board fabrication by 35%.

The logic board is just one of the many components that’s used by Apple inside an iPhone. It is one of the relatively expensive items in an iPhone apart from the A-series chip and the OLED display.

The analyst also notes that the 2020 iPhones will ship with a design that will be reminiscent of the iPhone 4. The new metal frame of the iPhones will feature “more complex segmentation design, new trenching and injection molding procedures, and sapphire or glass cover assembly to protect the trench injection molding structure.” This will also lead to an increase in the cost of the metal frame by as much as 60%, with the cost of the glass casing rising by around 40-50%.

Our Take

With such a notable increase in component cost, it is likely that Apple will also end up increasing the retail price of its 2020 iPhones. If that happens though, the company will likely end up selling fewer iPhones in 2020 despite many analysts believing that due to the addition of 5G and a new ToF sensor, the 2020 iPhones will lead to an upgrade supercycle.

We could possibly see Apple skip offering 5G on the cheaper 2020 iPhone 11 successor so as to ensure it is able to continue selling it at the same $699 price tag that it currently does.

Are you ready to pay more for a 5G iPhone?

[Via AppleInsider]