Apple is facing higher-than-expected component costs for this year’s iPhone 8, with 3D Touch panels expected to run as much as one-and-a-half times the price of equivalent parts developed for the LCD-equipped iPhone 7s and iPhone 7s Plus, according to a supply-chain report published Friday by the Economic Daily News (via DigiTimes).
TPK, Apple’s primary 3D Touch manufacturing partner, typically charges the tech-giant between $7 and $9 for every 3D Touch panel installed on current iPhone devices. According to the EDN report, however, that price point could ultimately balloon to between $18 and $22 per panel for the upcoming iPhone 8 — which could also be called the iPhone Edition or iPhone X.
Why the Price Hike?
The report cites the fact that OLED displays undergo a more complicated manufacturing process than their LCD counterparts, which is primarily due to OLED displays requiring a separate layer of protective glass bonding on both the front and back of the display panel, even before 3D Touch sensors can be applied.
“For 3D Touch solution used in existing iPhone series, TPK and fellow maker General Interface Solution (GIS) quote US$7-9 per smartphone” the report reads, while explaining that “The solution directly bonds 3D Touch sensors on LTPS TFT-LCD display panels of the iPhone, but 3D Touch solution for OLED panels entails bonding of a glass cover on the front and back side of an OLED panel each to reinforce the fragile OLED panel.”
The DigiTimes report claims that the actual costs of processing OLED-compatible 3D Touch modules are only 50% higher than their LCD counterparts; however TPK appears to be leveraging its position as the global leader, who offers the only tested and certified 3D Touch technology compatible with OLED displays, as a way of bargaining with Apple for higher prices.
Does Higher Component Costs Mean Higher Selling Prices?
Goldman Sachs analyst, Simona Jankowski, recently went on record suggesting that Apple’s iPhone 8 flagship could cost as much as $1,099 for a top-of-the-line variant boasting 256 GB of onboard storage, which would make Apple’s 10th anniversary flagship its most expensive iPhone ever offered. While increases in a wide range of costs — including 3D Touch panels, OLED displays, and 3D camera sensors — are sure to drive up the flagship’s overall selling price, one also needs to consider the sheer amount of next-generation technologies expected to make their way into the iPhone 8, which include wireless charging, advanced 3D camera tech, and more — all of which only further substantiate the higher cost when it’s all added up.