iPhone 12 costs 21% more than iPhone 11 to make and costs ₹25,000 more
Analysing the BoM (Bill of Materials) cost for Apple iPhone 12 and the iPhone 11 shows that the higher prices can be attributed to the new components that support 5G and the new OLED display.
The Apple iPhone 11 (64GB) costs ₹54,900 in India right now. The new Apple iPhone 12 starts at ₹74,900 (for 64GB) and goes all the way up to ₹84,900 for the 128GB. For the base model prices, the iPhone 12 is ₹25,000 more than the iPhone 11.
But according to a Bill of Materials (BoM) cost analysis done by Counterpoint, the iPhone 12 model costs just ₹30,300 to make.
The Counterpoint report indicates that the material costs to make the iPhone 12 (128GB) is 21% higher than what it takes to make the iPhone 11 and to corroborate this, the report shares the BoM costs of the iPhone 12 (128GB), both 6GHz and mmWave variants.
The report states that the sub-6GHz iPhone 12 (128GB) model costs $414 ( ₹30,300 approx) to make. The mmWave iPhone 12 (128GB) costs $431 ( ₹31,500 approx) to make. The higher BoM costs is due to the new components that support 5G and the new OLED display.
The report adds that the A14 Bionic chip, the audio and UWB chip and PMIC cost over 16.7% of the total BoM costs of the iPhone 12. Apple's own A14 Bionic increases the cost by over $17. The shift from LCD to OLED in the new iPhone 12 is also a significant change and raises the cost by more than $23.
One must remember that BoM costs of any device is always lower than what it retails for because the company must factor in costs for packaging, marketing and many other factors before the final tag is put on the device and it is put up for sale.