5.8-inch iPhone X Successor Might Cost Less Than $1,000

Iphone X A Aleksandravicius Shutterstock

A. Aleksandravicius / Shutterstock

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Apple is in the process of readying three new iPhone models for release this fall, with the latest rumors suggesting they’ll include a 5.85-inch iPhone X replacement, a larger 6.45-inch iPhone X Plus, and a mid-range 6.1-inch iPhone model featuring LCD display tech in lieu of OLED.

Considering current trends in the smartphone component market, and specifically that average smartphone ASPs continue to rise by the year, it’s only reasonable to assume that even though Apple’s current base-model iPhone X retails for $999 (plus tax), the company will have little choice but to raise that already pocket-pinching buy-in price even higher this year.

Though that may not end up being the case according to DigiTimes Research analyst, Luke Lin.

In a report published on Wednesday morning, Lin indicated that Apple’s manufacturing bill of materials (MBOM) — the cost of raw components and manufacturing — for its upcoming iPhone X replacement is expected to be slashed by as much as 10% relative to the current iPhone X.

Citing information obtained via upstream supply chain sources, Lin indicted in his report that “the vendor [Apple] has managed to reduce the new device’s initial [MBOM] to a level much lower than that of its present flagship model,” adding a claim that the MBOM of Apple’s current iPhone X is just over an estimated $400 per unit.

MBOM costs for Apple’s next-generation device could be around $40 less than the current model. However, worth pointing out is that Lin’s predictions appear to contradict the findings of a thorough iPhone X teardown conducted back in November 2017, which revealed that a 64 GB iPhone X cost approximately $357.50 to produce — including cost of components, labor, and assembly.

Nevertheless, Lin insists Apple was able to negotiate a new contact with its OLED display supplier, Samsung Display Co., consisting of more “satisfactory terms” for future OLED display production — securing lower costs which will be immune from rising unexpectedly.

“Because of the iPhone X’s weak demand, Apple pulled in a lot less OLED panels from Samsung Display than it had committed, giving the Korea-based panel supplier more bargaining chips in their negotiation over the OLED panel quotes for the next-generation iPhones,” Lin said.

Meanwhile, the DigiTimes analyst noted that in lieu of its 6.1-inch LCD-equipped iPhone model, Apple was planning to produce the 5.85-inch model boasting LCD instead OLED display technology — a move that may have rendered it the cheapest iPhone offering this year. He added, however, that development of this model “has been suspended since […] mid-February and may be eventually terminated.”

Interestingly, he still believes Apple will position its 5.85-inch OLED model as the cheapest of its three iPhone offerings, citing that “some of the smartphone’s recent engineering samples” appear to have incorporated unspecified components boasting “lower-level specifications” or “lower capacities” than components expected to be included in the 6.1-inch LCD iPhone — with “LPDDR memory,” among the major differences between them.

Lin provided no additional information about component costs, or anticipated MBOM estimates, in today’s report. And therefore we suggest considering this news with a grain of salt until further notice. It’s safe to assume, though, that if Apple is able to lower its MBOM by 10%, that the savings will be passed on to the consumer in a bid to make the high-end flagship more appealing to cost-conscious buyers.

Read iPhone X Overview

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