The new iPhone's 5G components and the A14 Bionic chipset contributes to the increased costs, taking the Bill of Materials (BoM) to $431.
A few months after Apple released its newest iPhone series, it has been reported that the iPhone 12 costs as much as 21 per cent more to produce compared to the earlier iPhone 11. The reason behind this is the newer generation of parts that went into the phone.
As per a report by Counterpoint Research, the new iPhone's 5G components and the A14 Bionic chipset contributes to the increased costs, taking the Bill of Materials (BoM) to $431.
“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,” said the report.
The report says that high BoM is a result of multiple factors. One of them is the A14 Bionic chipset, which is the first 5nm chip from the iPhone maker. It consists of a whopping 11.8 billion transistors, compared to 8.5 billion in the A13. In terms of CPU, GPU and neural engine, the added transistors provide a significant improvement in performance. The report also adds that Apple’s self-designed components including the A14, PMIC, Audio and UWB chip make up over 16.7% of the overall BoM cost.
Another upgrade is the new OLED panel that costs more than the LCD panel used in the iPhone 11. The panel alone adds $23 to the cost of the new iPhone. Enabling 5G has also brought up the BoM. Equipped with more RF components to support the 5G-related spectrum, the functionality adds around $19 to the costs. Notably, the functionality also brings in chip manufacturer Qualcomm into play, which is the second-largest electronic component supplier for the iPhone 12 after Samsung.
Apple has diversified its supply sources for the iPhone 12, adding to an increase in the total BoM of the phone. ". For the iPhone 12, the memory orders are split between industry leaders, with Samsung and KIOXIA (Toshiba) supplying NAND flash, and SK Hynix and Micron supplying LPDDR4X. The camera content shares are largely gained by Sony, LG Innotek and Sharp. NXP and Broadcom continue providing solutions for wireless connection and display/touch control," says the report.
The report adds that Cirrus Logic, Goertek, Knowles and AAC supply the audio design of the new iPhone.
On the other hand, to miniaturise the design and develop packaging for iPhone 12, Apple has used SiP (System in Package) by ASE and USI.
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