Apple could swallow increased production costs on its 2020 iPhones, according to reports.
The company is widely expected to launch four new high-end iPhones in 2020, alongside a cheaper iPhone SE successor.
For the four high-end devices, set to feature 5G connectivity for the first time, Apple is expecting additional manufacturing costs of between $30-$100 per device, but it has reportedly braced itself to swallow those costs, rather than increase prices.
According to reliable Apple analyst Ming-Chi Kuo, the company wants to retain 2019’s pricing structure, which has worked well and allowed Apple to sell more iPhones than usual.
This year’s iPhone 11 starts at just $699, whilst the iPhone 11 Pro and iPhone 11 Pro Max are on sale for $999 and $1,099 respectively. Pricing varies in markets around the world.
Now, in a new research paper as part of his work with TF International Securities, Ming-Chi Kuo has suggested that Apple will offset the cost of introducing 5G by reducing supply chain expenses.
One of the ways the company will do this is to reduce its upfront engineering payment it was planning to give to suppliers of the redesigned metal chassis expected on the 5G phones.
Rather than including the cost of researching, designing, developing and testing the device, Apple will move some of its research and development in house to cut costs.
It has previously been suggested that the new 2020 iPhones will feature a metal frame and a design similar to the iPhone 4, with flatter edges and a more industrial look compared with the iPhone 11.
This will reportedly be more expensive but deliver a premium look and feel.
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