Pricey 5G parts won’t bring price hike to 2020 iPhones

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This iPhone SE 2 concept based on the iPhone 5.
The 2020 iPhone lineup can't come soon enough.
Photo: Hubert Jarechowicz/ ConceptsiPhone

Apple’s highly anticipated addition of 5G modems to the 2020 iPhone lineup may not end up costing customers extra after all.

TF International Securities analyst Ming-Chi Kuo says that his supply chain sources indicate that the four 5G-capable 2020 iPhone models will be priced similar to the iPhone 11 and iPhone 11 Pro, even though 5G components are more expensive.

In his latest research note obtained by Macrumors, Kuo says production costs could rise by $30 to $100 per iPhone. Instead of jacking up iPhone prices though, Kuo says Apple plans to reduce other supply chain expenses.

One way Apple could trim its costs is by dropping its upfront non-recurring engineering payment to certain suppliers. The 2020 iPhone is expected to have a redesigned metal frame and body. Apple usually gives suppliers the one-time payment to research and develop new components. More of that work is being done internally at Apple now.

Suppliers have needed the non-recurring engineering payment to help keep them afloat during periods of slow iPhone sales. That might not be a problem for most suppliers anymore though once Apple starts releasing new iPhones twice a year.

The redesigned metal frame of the 5G iPhones will also supposedly costs significantly more than the current metal body. Other features could include Touch ID embedded in the display, A14 processor, a smaller Face ID notch, improved cameras and more.