5.8-inch OLED iPhone model could be 10 percent cheaper to produce than iPhone X

Posted:
in iPhone
Apple's follow-up to the iPhone X will cost less to produce than the current model, a report claims, with the next-generation smartphone thought to have a manufacturing bill of materials more than 10 percent lower, despite expectations that it will have upgraded specifications.




Analyst Luke Lin of Digitimes Research claims a 5.85-inch OLED iPhone believed to be arriving this fall as part of the iPhone line's yearly update will be far lower than the existing MBOM for the iPhone X, which he claims was more than $400 when it launched last year. Effectively this suggests the unannounced smartphone will cost Apple at least $40 less to produce than the iPhone X at launch.

Lin's claimed cost of production is considerably higher than the amount speculated in a teardown and analysis of installed components performed in November shortly after its release. At the time, the 64-gigabyte iPhone X was said to cost approximately $357.50 to produce, including the cost of labor for the final assembly of the device.

According to Lin's supply chain study, Apple has managed to reach an agreement with Samsung Display to secure "satisfactory terms" for OLED display panels that will prevent the cost rising. Samsung Display was allegedly in a better negotiating position for the deal due to Apple supposedly ordering fewer OLED panels than it previously committed to buying for the iPhone X.

Another Digitimes report from Monday claimed Taiwan's display panel industry is anticipating orders for approximately 110 to 130 million OLED panels destined for the iPhone X and other future iPhones in 2018, and ordering between 250 and 270 million display panels overall across the year.

For other components, Lin does not describe what measures are being taken by component vendors to make the device cheaper to produce, instead calling them a "cost reduction."

Lin does agree with speculation that there will be three iPhone devices shipping this fall, with a 5.85-inch OLED device joined by a 6.45-inch model and a 6.1-inch LCD version. It is suggested that the cost savings could make the model with the smaller OLED panel the cheapest of the three at retail.

It is alleged some "recent engineering samples" for the model in question have "adopted components with lower-level specifications or lower capacities" than the 6.1-inch LCD variant, including reduced memory, helping Lin's claim it will be the value proposition of the trio.

Comments

  • Reply 1 of 16
    mavemufcmavemufc Posts: 326member
    And will it cost 10% less to buy? Probably not.
    DavidAlGregoryharry wild
  • Reply 2 of 16
    Component costs go down every year for commodity parts such as display screens and memory. Therefore older iPhone models (such as SE, 7 and 7+) are less costly to produce with each passing year. This article simply says that the same will happen to the 2017 iPhone X. In addition, the iPhone X will drop in price because Face ID will no longer be new and supply constrained.
    edited March 2018 mike1thtracerhomie3bb-15
  • Reply 3 of 16
    asciiascii Posts: 5,941member
    Once they get the price down a bit and offer a larger screen it will sell a lot better.
  • Reply 4 of 16
    78Bandit78Bandit Posts: 232member
    The 6.1" LCD device was originally rumored by Ming to be $650 - $750.  That was revised up to the $700 - $800 range later.  Assuming the article is correct and the 5.8" OLED device is the lowest cost I don't think those rumors can be reconciled.  Even if Apple reduces the iPhone X2 retail price by 10% that would still be $900.

    A more likely Fall lineup is the 6.1" LCD device for $750, a 5.8" OLED for $900, and a 6.4" OLED for $1,050.  I just don't see any way to flip the price points of the 5.8" and 6.1" devices and have it be competitive.
  • Reply 5 of 16
    neilmneilm Posts: 634member
    Component costs go down every year for commodity parts such as display screens and memory. Therefore older iPhone models (such as SE, 7 and 7+) are less costly to produce with each passing year. This article simply says that the same will happen to the 2017 iPhone X. In addition, the iPhone X will drop in price because Face ID will no longer be new and supply constrained.
    Exactly. And the X should be recognized as a premium-priced technology demonstration for features that will trickle down to the mainstream iPhones over time.

    Yesterday I set up a new X for someone in the office, and it's a really nice bit of kit. Thought I would object to the slightly larger chassis size, but it's really not noticeable unless you stack a regular 8 (or 7 or 6) on top. Even then it's not much different. But the added screen real estate sure is.

    I now have a bad case of X envy!
    h2pStrangeDayswatto_cobra
  • Reply 6 of 16
    I really do not see the great value in the OLED screen, Face ID or the skinny bezel. Nothing I would pay extra for. To be honest, the camera could do without the dual receptors if it costs one cent extra.

    Some of us want a nice smartphone, but do not see it as the axis of our universe. My guess is the phone (X) is not selling that well and maybe Apple has discovered the price of demand destruction. Not paying Apple’s huge margin for a phone I will keep maybe 2 years and resell for less than half the list price- that is as bad as buying a Chevy. Not going to rent (lease) the thing either.

    When I have been in stores where iPhones are for sale I see few buying the X. At work (Hospital) we require patients to put their phones on Airplane Mode at minimum and to secure them in some cases- so we see a lot of phones. I see very few iPhone X models- same for the latest Samsungs.

    My guess is that smartphones have hit saturation in most markets and the improvement from generation to generation is now so little as to slow sales. My timing may be off, but the days of 60-70% margins on the bulk of their phones are not far off. Paying $1K for a cell phone is obscene.
  • Reply 7 of 16
    thttht Posts: 3,241member
    78Bandit said:
    The 6.1" LCD device was originally rumored by Ming to be $650 - $750.  That was revised up to the $700 - $800 range later.  Assuming the article is correct and the 5.8" OLED device is the lowest cost I don't think those rumors can be reconciled.  Even if Apple reduces the iPhone X2 retail price by 10% that would still be $900.

    A more likely Fall lineup is the 6.1" LCD device for $750, a 5.8" OLED for $900, and a 6.4" OLED for $1,050.  I just don't see any way to flip the price points of the 5.8" and 6.1" devices and have it be competitive.

    The rumors, or speculation derived from supply chain components, for the 6.1” are super strange. It’s LCD vs OLED and aluminum vs steel, but KGI are says no 3D Touch and single cam for the back. That is really strange. And, they can further differentiate by using an A11 SoC instead of an prospective A12, or even go down to an A10.

    If so, the current iPhone 8 Plus, maybe even the iPhone 7 Plus, will be better than this 6.1 iPhone X style phone in a few ways. It has 3D Touch, may have a better LCD, has a 2 camera back cam. Being larger than a 5.8” iPhone X is a big feature though. I can’t see them pricing it much lower than $800, and the upsell features with the 5.8” will have to be pretty big for another $100 to $200. OLED and steel vs LCD and aluminum won’t be enough. The back cam and 3D Touch won’t be enough. 64 GB vs 32 GB storage, on top of the others, maybe?
  • Reply 8 of 16
    canukstormcanukstorm Posts: 1,960member
    tht said:
    78Bandit said:
    The 6.1" LCD device was originally rumored by Ming to be $650 - $750.  That was revised up to the $700 - $800 range later.  Assuming the article is correct and the 5.8" OLED device is the lowest cost I don't think those rumors can be reconciled.  Even if Apple reduces the iPhone X2 retail price by 10% that would still be $900.

    A more likely Fall lineup is the 6.1" LCD device for $750, a 5.8" OLED for $900, and a 6.4" OLED for $1,050.  I just don't see any way to flip the price points of the 5.8" and 6.1" devices and have it be competitive.

    The rumors, or speculation derived from supply chain components, for the 6.1” are super strange. It’s LCD vs OLED and aluminum vs steel, but KGI are says no 3D Touch and single cam for the back. That is really strange. And, they can further differentiate by using an A11 SoC instead of an prospective A12, or even go down to an A10.

    If so, the current iPhone 8 Plus, maybe even the iPhone 7 Plus, will be better than this 6.1 iPhone X style phone in a few ways. It has 3D Touch, may have a better LCD, has a 2 camera back cam. Being larger than a 5.8” iPhone X is a big feature though. I can’t see them pricing it much lower than $800, and the upsell features with the 5.8” will have to be pretty big for another $100 to $200. OLED and steel vs LCD and aluminum won’t be enough. The back cam and 3D Touch won’t be enough. 64 GB vs 32 GB storage, on top of the others, maybe?
    FaceID requires the A11 SoC.
  • Reply 9 of 16
    canukstormcanukstorm Posts: 1,960member
    78Bandit said:
    The 6.1" LCD device was originally rumored by Ming to be $650 - $750.  That was revised up to the $700 - $800 range later.  Assuming the article is correct and the 5.8" OLED device is the lowest cost I don't think those rumors can be reconciled.  Even if Apple reduces the iPhone X2 retail price by 10% that would still be $900.

    A more likely Fall lineup is the 6.1" LCD device for $750, a 5.8" OLED for $900, and a 6.4" OLED for $1,050.  I just don't see any way to flip the price points of the 5.8" and 6.1" devices and have it be competitive.
    "A more likely Fall lineup is the 6.1" LCD device for $750, a 5.8" OLED for $900, and a 6.4" OLED for $1,050.  I just don't see any way to flip the price points of the 5.8" and 6.1" devices and have it be competitive."

    Agreed.
  • Reply 10 of 16
    thttht Posts: 3,241member
    tht said:
    78Bandit said:
    The 6.1" LCD device was originally rumored by Ming to be $650 - $750.  That was revised up to the $700 - $800 range later.  Assuming the article is correct and the 5.8" OLED device is the lowest cost I don't think those rumors can be reconciled.  Even if Apple reduces the iPhone X2 retail price by 10% that would still be $900.

    A more likely Fall lineup is the 6.1" LCD device for $750, a 5.8" OLED for $900, and a 6.4" OLED for $1,050.  I just don't see any way to flip the price points of the 5.8" and 6.1" devices and have it be competitive.

    The rumors, or speculation derived from supply chain components, for the 6.1” are super strange. It’s LCD vs OLED and aluminum vs steel, but KGI are says no 3D Touch and single cam for the back. That is really strange. And, they can further differentiate by using an A11 SoC instead of an prospective A12, or even go down to an A10.

    If so, the current iPhone 8 Plus, maybe even the iPhone 7 Plus, will be better than this 6.1 iPhone X style phone in a few ways. It has 3D Touch, may have a better LCD, has a 2 camera back cam. Being larger than a 5.8” iPhone X is a big feature though. I can’t see them pricing it much lower than $800, and the upsell features with the 5.8” will have to be pretty big for another $100 to $200. OLED and steel vs LCD and aluminum won’t be enough. The back cam and 3D Touch won’t be enough. 64 GB vs 32 GB storage, on top of the others, maybe?
    FaceID requires the A11 SoC.
    Good point, but that’ll drive the cost of the 6.1 LCD models up. It’s going nuke sales of the OLED 5.8 and 6.5 inch devices. Screen size is a big feature, bigger than the screen tech or the materials or the performance or the camera. Alternatively, the 6.1 LCD could be at the $900 price point, the 5.8 OLED stays at $1000 and the 6.5 OLED starts at $1100, and an 8S Plus at $800.

    But, without 3D Touch or the 2 cam back cam for $800 or even $750? Pretty tough sell. People should be able to get an 8 Plus for $700 next Fall if Apple continues selling 1 year old model for $100 less, and it’ll have the other features. The 7 Plus will have those features. The 6.1 just throws a big wrench into the lineup.
  • Reply 11 of 16
    canukstormcanukstorm Posts: 1,960member
    "The 6.1 just throws a big wrench into the lineup"

    Yes, it does.  Only reason I can think of having the 6.1" LCD is for those users that want; 1) all-screen design of iPhone X, 2) bigger screen than iPhone 8 Plus, 3) FaceID, all at a lower price than iPhone X.  I see no reason why Apple, at this point, can't have this iPhone start at a price of $749 (64GB). As long as the camera & screen are "good enough", those users aren't likely going to care about lack of 3D Touch or dual-camera rear camera.  And chances are you're right, it'll cannibalize some of the sales of the OLED iPhones.
    edited March 2018 bb-15
  • Reply 12 of 16
    StrangeDaysStrangeDays Posts: 8,274member

    Some of us want a nice smartphone, but do not see it as the axis of our universe. My guess is the phone (X) is not selling that well and maybe Apple has discovered the price of demand destruction. Not paying Apple’s huge margin for a phone I will keep maybe 2 years and resell for less than half the list price- that is as bad as buying a Chevy. Not going to rent (lease) the thing either.

    When I have been in stores where iPhones are for sale I see few buying the X. At work (Hospital) we require patients to put their phones on Airplane Mode at minimum and to secure them in some cases- so we see a lot of phones. I see very few iPhone X models- same for the latest Samsungs.

    My guess is that smartphones have hit saturation in most markets and the improvement from generation to generation is now so little as to slow sales. My timing may be off, but the days of 60-70% margins on the bulk of their phones are not far off. Paying $1K for a cell phone is obscene.
    Don’t quit your day job man - the ASP for iphone went up compared to YoY, and it’s very likely thanks to the X, a premium product priced to limit demand due to scalability of brand new tech components. Yet even still Cook said it sold higher than expected, topping all iPhones each week it was available last quarter. That’s a success, not a failure, dude. 

    There’s nothing any more obscene about paying $1000 for a handheld computer than there is paying that (and more) for an ipad, laptop, or desktop. It’s even rather cheap compared to computers in the ‘80s. It’s a tool. Do you get value from the tool equal or greater than the price? If so, the decision is simple. 

    It’s not for everyone, and that’s OK. 
  • Reply 13 of 16
    urashidurashid Posts: 92member
    Paying $1K for a cell phone is obscene.
    I think it is relative.  I remember buying a very nice IBM Thinkpad in the 90's for upwards of $3000.  I used it maybe 10 hours a week, and it became too slow after a couple of years.  I get a lot more use of the $1000 phone, for same tasks and more, and quite a bit more portability.  I didn't find the price of the Thinkpad obscene, and I find the phone's $40ish monthly expense more than justfied.
  • Reply 14 of 16
    canukstormcanukstorm Posts: 1,960member

    Some of us want a nice smartphone, but do not see it as the axis of our universe. My guess is the phone (X) is not selling that well and maybe Apple has discovered the price of demand destruction. Not paying Apple’s huge margin for a phone I will keep maybe 2 years and resell for less than half the list price- that is as bad as buying a Chevy. Not going to rent (lease) the thing either.

    When I have been in stores where iPhones are for sale I see few buying the X. At work (Hospital) we require patients to put their phones on Airplane Mode at minimum and to secure them in some cases- so we see a lot of phones. I see very few iPhone X models- same for the latest Samsungs.

    My guess is that smartphones have hit saturation in most markets and the improvement from generation to generation is now so little as to slow sales. My timing may be off, but the days of 60-70% margins on the bulk of their phones are not far off. Paying $1K for a cell phone is obscene.
    Don’t quit your day job man - the ASP for iphone went up compared to YoY, and it’s very likely thanks to the X, a premium product priced to limit demand due to scalability of brand new tech components. Yet even still Cook said it sold higher than expected, topping all iPhones each week it was available last quarter. That’s a success, not a failure, dude. 

    There’s nothing any more obscene about paying $1000 for a handheld computer than there is paying that (and more) for an ipad, laptop, or desktop. It’s even rather cheap compared to computers in the ‘80s. It’s a tool. Do you get value from the tool equal or greater than the price? If so, the decision is simple. 

    It’s not for everyone, and that’s OK. 
    "the ASP for iphone went up compared to YoY,"

    Two possible reasons for that: 1) iPhone X sales were strong, 2) iPhone 8 Plus sales were strong.

    "
    There’s nothing any more obscene about paying $1000 for a handheld computer.." => Problems is, is that many users don't see an iPhone, or any premium smartphone, as a handheld computer that can now have 3 to 4 years of useful life. They still see it as a phone. It's perception.
  • Reply 15 of 16
    I really do not see the great value in the OLED screen, Face ID or the skinny bezel. Nothing I would pay extra for. To be honest, the camera could do without the dual receptors if it costs one cent extra.

    Some of us want a nice smartphone, but do not see it as the axis of our universe. My guess is the phone (X) is not selling that well and maybe Apple has discovered the price of demand destruction. Not paying Apple’s huge margin for a phone I will keep maybe 2 years and resell for less than half the list price- that is as bad as buying a Chevy. Not going to rent (lease) the thing either.

    When I have been in stores where iPhones are for sale I see few buying the X. At work (Hospital) we require patients to put their phones on Airplane Mode at minimum and to secure them in some cases- so we see a lot of phones. I see very few iPhone X models- same for the latest Samsungs.

    My guess is that smartphones have hit saturation in most markets and the improvement from generation to generation is now so little as to slow sales. My timing may be off, but the days of 60-70% margins on the bulk of their phones are not far off. Paying $1K for a cell phone is obscene.
    Ill give you one really good reason why the ipx is so fantastic: many apps give you the ability to use face id and that means it automatically fills in your userid and password for you automatically - it really saves time logging on all kinds of apps and takes all the pain out if having to remember passwords. Its not just for opening the phone.
  • Reply 16 of 16
    Apple will pocket the 10% for employee bonus aka as top management stock options!
Sign In or Register to comment.