Apple May Use Cheaper Battery Parts to Save on Costs in iPhone 12: Ming-Chi Kuo

Apple is facing higher production costs for iPhone 12 due to the inclusion of 5G.

By Tanishka Sodhi | Updated: 21 August 2020 14:32 IST

Apple May Use Cheaper Battery Parts to Save on Costs in iPhone 12: Ming-Chi Kuo

The inclusion of 5G hardware has reportedly increased Apple’s production costs

Highlights

Apple is said to use cheaper battery technology for the iPhone 12 series
Adopting 5G has increased Apple’s production costs
Apple will also follow a similar move for the next generation AirPods

Apple will adopt cheaper and less complex battery technology for the upcoming iPhone 12 series in order to cut costs on next-generation hardware, according to research analyst Ming-Chi Kuo. As the company is facing higher production costs due to the inclusion of 5G hardware, it is attempting to use less expensive components in other areas. Apple will reportedly move to a simpler and smaller battery board design that will have fewer layers.

In a note to investors that was accessed by MacRumors and AppleInsider, Apple anyalyst Ming-Chi Kuo said that Apple was putting “higher bargaining pressure” on its suppliers and the battery board was an area Kuo believed suppliers would see the biggest cost trimming. The battery board for iPhone 12 will reportedly be 40-50 percent cheaper than the equivalent part in the iPhone 11 series.

The adoption of sub-6GHz 5G technology will increase Apple's cost by around $75-$85 (roughly Rs. 5,600 to Rs. 6,300), and the millimetre wave technology will incur another $125-$135 (roughly Rs. 9,300 to Rs. 10,100) for the company.

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Next year's iPhone 12S lineup will see the tech giant opt for a purely soft board design that will shave off 30 to 40 percent compared to the iPhone 12 board price, noted Kuo. Apple is trying to find ways to offset a costly upgrade to 5G; however, these cost saving measures could hurt current battery board suppliers.

Kuo said that Apple would make similar moves with AirPods, abandoning the existing second-generation AirPods battery PCB tech for a system-in-package design that is likely to make its debut with a third-generation model in the first half of 2021. These battery cells will drive down average unit cost, which is reportedly on track to sink by 25 percent to 35 percent in the second half of 2020.

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Apple is expected to launch the iPhone 12 series this autumn, although reports suggest that the launch may be delayed from Apple's traditional September launch timeline to October.

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