Apple is preparing to charge more for the iPhone 12 than it did the iPhone 11, according to sources close to the company's supply chain. Increasing costs in the manufacturing process and concerns over sales projections are driving Cupertino's decision, according to PhoneArena.
Initially, Apple was predicted to undercut the price of the previous iPhone by $50, creating perhaps its first truly affordable flagship-quality smartphone. Recent reports surrounding the upcoming release of the iPhone 12 suggested it would start shipping for $649. While fans celebrated that news, it was something many analysts believed was unlikely.
Throughout the years, the price of the iPhone has risen incrementally. Considering the various upgrades coming to the new device, it makes sense that gradual price increase will continue this year.
According to the report, a tipster claiming to be close to the supply chain took to Chinese social media site Weibo to claim the iPhone 12 will cost $749. Problems in the production of the new device are reportedly causing Apple to rethink both its pricing structure and launch strategy.
It seems the cost of building the new smartphone is higher than the company expected. A complete iPhone 12 reportedly costs $50 more to manufacture than the iPhone 11, possibly because of expensive 5G components and a new OLED display. Apple has directly offset this additional outlay by pushing it onto consumers.
Furthermore, the manufacturing process is reportedly proving to be a headache for this year's iPhone line up. The same source said Apple's suppliers cannot keep up with the initial orders the company made. Cupertino was planning to have 80 million units available to sell between an October launch and the end of the holiday season.
As reported by Yahoo Finance, analysts saw the delay of the new product coming. They also thought the 80 million sales goal was ambitious amid the coronavirus pandemic, although Apple insisted it can sell that many units. If manufacturers are unable to keep up with the firm's demands, sales expectations will need to be reassessed.
This may mean consumers will pay more across the new range of smartphones. Apple also planned to launch iPhone 12 Pro models which have better specs than the standard handset. If the regular handset costs $50 more than last year's model, it is likely the Pro variants will also get a bump.
Apple is also rumored to be cutting costs in other areas. For example, it is thought none of the new smartphones will come with fundamental accessories. According to PhoneArena, there will be no EarPods in the box, something the company recently started with its new Apple Watch models. The same report suggests Apple will not include a charger with its new smartphones, forcing customers to buy a separate power pack.