Kuo: Apple Looking to Save on Costs in iPhone 12 With Simpler Battery Board Design

Apple is looking to put a pricing squeeze on component suppliers for the upcoming iPhone 12 lineup to help offset increased costs for new 5G technology and minimize the need for price increases across the flagship lineup, according to a new research note from analyst Ming-Chi Kuo viewed by MacRumors.

iPhone 12 5G New 1
Kuo says adoption of Sub-6GHz 5G technology will increase Apple's costs by $75–$85, while millimeter wave technology will incur a $125–$135 cost for Apple, so the company is cutting costs on other components wherever it can.

While Apple has broadly been putting "higher bargaining pressure" on its suppliers, the battery board is one area where Kuo believes suppliers will see the biggest cost trimming with Apple reportedly moving to a simpler and smaller design with fewer layers. The hybrid hard and soft battery board for the ‌iPhone 12‌ will reportedly be 40–50% cheaper than the equivalent part in the iPhone 11 series, although this component is likely a small contributor to Apple's overall costs.

Looking out further into the future, Kuo says Apple will push the envelope even more with the "‌iPhone‌ 12s" lineup in 2021, adopting a purely soft board design that will shave off an additional 30–40% compared to the ‌iPhone 12‌ board price.

Apple has also been putting pricing pressure on its circuit board suppliers for the AirPods, Kuo says, with the average price of soft and hard boards in the AirPods 2 declining by 25–35% since the first half of the year.

Apple's current suppliers will face even more issues when the AirPods 3 launch in the first half of 2021, according to Kuo. He reiterates his previous claims that the next-generation earphones will follow the AirPods Pro in adopting an integrated system-in-package (SiP) design rather than the surface-mount technology (SMT) found in the current AirPods 2.

Related Roundups: AirPods 3, iPhone 12
Buyer's Guide: AirPods (Neutral)
Related Forums: AirPods, iPhone

Top Rated Comments

PinnyHead Avatar
32 months ago
While this type of negotiating certainly benefits the immediate bottom line of Apple, I hope they are not pushing suppliers to the point that we will be getting lesser quality.
Score: 30 Votes (Like | Disagree)
jarman92 Avatar
32 months ago
Are any consumers actually excited about 5G? Seems like the only people who care are cellular network executives. I love to have the latest tech, but have zero desire for a 5G phone and am really sick of hearing about it. Hopefully this ridiculous race to 5G won’t compromise the rest of the iPhone.
Score: 27 Votes (Like | Disagree)
Adam Warlock Avatar
32 months ago
Steve Jobs' nightmare has turned into reality: the salesmen have taken over the company. Rather than concern themselves with the best experience for their customers we hear stories about cost-savings by removing the charger from the box and now squeezing suppliers, all with a backdrop of ridiculously high-priced phones.

Tim Apple's greatest innovation thus far is the Apple credit card. Bravo!
Score: 26 Votes (Like | Disagree)
JPack Avatar
32 months ago
For those who are confused about what Kuo is talking about.

He's referring to the charge controller board on the end of the battery pack. He's not talking about the cell.



Attachment Image
Score: 20 Votes (Like | Disagree)
JPack Avatar
32 months ago

What does making it a “soft board” mean? Control of battery charging is handled mostly in software, the SOC Or a physically softer board? If the option listed, why does that lower costs, and does it affect performance?
MacRumors editors can’t read Chinese, so they use Google Translate. As a result, the translation is terrible. They should really hire someone who can translate properly.

Kuo says rigid-flex PCBs are currently used for the battery controller. For iPhone 12, he expects Apple to use flexible PCBs with reduced surface area along with fewer layers. This will help reduce costs by 40-50%. Rigid-flex PCBs are the gold standard for electronics. They are the most expensive type of PCB and they are the most efficient (in terms of packaging and mounting components) and reliability. Flexible PCBs are cheaper to produce as they have a simpler manufacturing process.

Ultimately, this represents a very small cost savings for Apple but every dollar counts given the high cost of 5G components and design.

For people asking, “Why should I care?” You shouldn’t. You’re not Kuo’s audience. Kuo is an analyst working for a brokerage company. He’s wrote this note to let people know which company to invest stocks in (the ones making PCBs).
Score: 18 Votes (Like | Disagree)
Wanted797 Avatar
32 months ago

Come on!!! 2 trillion dollar company and this is what we are getting. Apple you can do better. Don’t be Microsoft!! please
What the hell does your comment even mean?
Score: 17 Votes (Like | Disagree)

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