Apple’s new iPhone SE is upgraded with a lot of things, from a new generation processor to a larger battery capacity, especially 5G connectivity. However, for the first time in history, Apple has increased the price of its cheapest iPhone, from $ 399 to $ 429, or an increase of $ 30.
It is almost certain that the price increase of 30 USD is because of 5G technology.
Price hikes for smartphones with 5G technology are common, even for Apple. When switching from iPhone 11 to iPhone 12, Apple increased the price of basic iPhone models from $699 to $829.
According to a report by Counterpoint Research, that price increase is not due to the expensive OLED display, but rather to the 5G modem. The report by Fomalhaut Techno Solutions and Nikkei also said that Qualcomm’s 5G modem chip is the most expensive component in the iPhone 12 product line, contributing up to $ 90 of the total cost of $ 400 to produce an iPhone 12 Pro.
Apple really doesn’t have many options. When it comes to 5G modems, Qualcomm is pretty much the only choice. After all, there is a reason why Apple has to sue Qualcomm, because the patent fees for using its modem chips are too high. But then, Apple swallowed its words, to continue to cooperate with Qualcomm and use its 5G modem chip.
Apple has tried to switch to using Intel’s 5G modem chips, but the quality of these modem chips can’t be compared with Qualcomm’s. Apple is still trying to change that, by buying Intel’s 5G modem chip manufacturing business and developing its own modem chip. But it may take many more years before Apple can launch these chips to replace them.
But in the short term, the iPhone SE is no longer priced at 399 USD. Even if Apple could make its own modem chips, it’s unlikely to bring prices down to their original levels. 30 USD may not be a lot of money, but on a cheap iPhone model, it can make many users hesitate.
Is equipping the iPhone SE with 5G technology and trading it up with an increase in price, is Apple’s smart strategy and will it cause sales of this low-cost iPhone to decline compared to before? Let’s wait and see.
Reference: theverge