In an effort to save money on next-generation hardware, Apple will adopt cheaper and less complex battery technology for so-called “iPhone 12,” “iPhone 12S” and “AirPods 3” devices, according to TF Securities analyst Ming-Chi Kuo.
Starting this year’s expected family “iPhone 12”, Kuo said in a note to investors on Friday that he believes Apple will reduce the number of layers of rigid-flex battery plates and push active cell components in a smaller area to an average unit price to reach 40% to 50% lower than iPhone 11. Looking ahead to 2021, Apple’s “iPhone 12S” will slip rigid flex boards for a flexible architecture that should save 30% to 40% for “iPhone 12” battery unit cost.
The cost-cutting measures, coupled with increased bargaining pressure to drive component prices down, are expected to hurt current suppliers of battery boards.
Apple is looking for ways to compensate for an expensive upgrade to 5G, Kuo says. The analyst points the cost of upgrading to sub-6Ghz and millimeter wave technologies at $ 75 to $ 85 and $ 125 to $ 135, respectively. The strategy should keep consumer prices stable during the transition to 5G.
Regulatory filings unveiled in July suggest that Apple’s iPhones by 2020 will integrate batteries with somewhat reduced capacity compared to the iPhone 11 series. Depending on the handset size, this year’s cells are expected to be rated at 2,227mAh, 2,775mAh and 2,815mAh, compared to 3,110mAh for iPhone 11 and 3,190mAh for iPhone 11 Pro. The lone upgrade could be a 3,687mAh component, which smelled like recording in the 6.7-inch “iPhone 12 Pro Max,” with the spec making it slightly more capable than the 3,500mAh version used in iPhone 11 Pro Max.
Kuo adds that Apple will make similar moves with its AirPods lineup. The company is slated to abandon existing second-generation AirPods battery PCB tech for a system-in-package design that will debut with a third-generation model in the first half of 2021. The battery cells of the new units will further drive average unit costs, which are on track to fall 25% to 35% in the second half of 2020, Kuo says.
Apple is widely expected to launch four “iPhone 12” models this fall. More affordable 5.4- and 6.1-inch “iPhone 12” models are rumored over OLED screens, dual cameras, an A14 processor and aluminum chassis, while flagship 6.1- and 6.7-inch “iPhone Pro “phones add upgraded displays, an extra camera and, on the largest” iPhone 12 Pro Max “model, a LiDAR scanner. All iPhones of 2020 must have 5G connectivity.
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