When Apple launches new iPhones in 2020, the expectation is the new handsets will boast 5G connectivity. Which could suggest a price change, too.
However, according to analyst Ming-Chi Kuo (via MacRumors), it may not be a significant price increase. Kuo does believe that production costs will go up, though, courtesy of the 5G-related components required, somewhere between $30 and $100 depending on the model. But it sounds like the analyst believes Apple won’t be passing that cost over to the customers next year.
In a research note with TF International Securities, viewed by MacRumors, Kuo said Apple instead aims to offset the cost of 5G by reducing its supply chain expenses, potentially including dropping its upfront non-recurring engineering payment to suppliers of the redesigned metal chassis and frame for 5G iPhones.
Non-recurring engineering refers to the one-time cost to research, design, develop, and test a new product or component. Kuo believes Apple will shift more of this research and development in house.
The change could also be a sign of things to come. The non-recurring engineering payment is a way for Apple’s suppliers to stay out of the financial red when iPhone sales slow in any given year. However, Kuo notes that Apple’s expected change to its iPhone launch in 2020 and beyond makes it less of an important aspect for those suppliers.
That ties to the rumors that Apple is going to be changing to a biannual iPhone release schedule, with the company releasing less expensive iPhone models in the first half of a given year, and more expensive options later in the year.
The 5G iPhones launching in 2020 are also expected to boast a design change, too, adopting a metal frame similar to what Apple used in the iPhone 4 all those years ago.
At this point we know that 5G iPhones are coming. Qualcomm’s president has confirmed as much. And we expect them to arrive next year — with four models rumored to boast the faster wireless connectivity option.
If this does pan out, then it’s good news for folks who plan on buying an iPhone next year. It will be interesting to see if next year’s iPhones are priced similarly to this year’s models, even with all the rumored changes planned for next year’s models. This year’s iPhones started at $699 (for the iPhone 11), while the iPhone 11 Pro starts at $999 and the iPhone 11 Pro Max starts at $1,099.
Are you already planning on upgrading next year? Would you still go through with it if the prices changed dramatically compared to this year’s models?