Production cost of Apple iPhone 12 costs a lot more than iPhone 11: Report

It is no secret that Apple iPhone 12 costs substantially more than its predecessor iPhone 11 but do we know why? According to a recent report by Counterpoint Research, the iPhone 12’s Bill of Materials (BOM) total comes to $431 (Rs 31,650 approx.). The reason for this is Apple’s use of newer parts, including the 5G-components and the new A14 Bionic chipset.

“Assuming a 38% mmWave mix, the blended materials cost for the iPhone 12 with 128GB NAND flash is nearly $415, a 21% increase over its predecessor. Application processor, 5G baseband, display and 5G RF components represent the major areas of the cost increase,” the Counterpoint Research report read.

Why is the new iPhone so expensive to produce?

One of the new elements in the Apple iPhone 12 is the new OLED panels that cost more than the the LCD panel used on the iPhone 11. These add an additional  $23 (Rs 1700 approx.) to the cost of the new phone. Enabling 5G has also brought up the cost, bringing back Qualcomm in the equation. 

The American chipset manufacturer has provided the paired transceivers and RF discrete components for both sub-6GHz and mmWave versions of the new iPhone 12 series. “Our analysis shows the blended cost increase from the RF subsystem is around $19,” says the report read.

The Apple A14 Bionic chipset is also the first 5nm chip from the company. Compared to the A13 from its predecessor, the new chipset has 11.8 billion transistors, 39% more. The report suggests that the new chipset adds another $17 in the BOM. 

“Our analysis also suggests Apple’s self-designed components including the A14, PMIC, Audio and UWB chip make up over 16.7% of the overall BoM cost,“ the report said

Diversified supply

The iPhone 12 gets its various components from a range of companies which also has a say on the increased BOM of the phone. The report mentions that Apple sources its memory components from Samsung and KIOXIA (Toshiba), but the LPDDR4X RAM comes from SK Hynix and Micron. 

While Sony, LG and Sharp supply the camera components of the new phone, NXP and Broadcom supply the components required for wireless connections and touch controls.
The report also adds that Cirrus Logic, Goertek, Knowles and AAC supply the audio design of the new iPhone. Meanwhile, the power and battery management ICs are supplied by TI and ST. The new iPhone also leverages the SiP (System in Package) by ASE and USI. This is used to miniaturise the design and develop packaging for the smartphone.