Analyst predicts huge price increases once Apple launches 5G smartphone

Apple is widely expected to release its first 5G phone next, and if renowned analyst Ming-Chi Kuo is correct, it is going to be a really pricey toy indeed. Kuo, who is one of the world’s top Apple analysts, is often right on the spot when it comes to the company’s products.

Writing on AppleInsider, Kuo recently discussed the differences we can expect between the iPhone 11 and the 5G iPhone. The bottom line is that the latter’s parts are going to be a lot more expensive – in some instances, as much as 60%, which will be reflected in the device’s retail price.

Kuo estimates that the 5G chipset used in next year’s iPhone will be 35% more expensive. While the retail price doesn’t necessarily have to go up with the same amount, it’s not likely that Apple will simply absorb the cost increase in the form of a lower margin.

Other upgrades will also be necessary to accommodate the new technology. Kuo predicts that a 5G phone’s metal frame will be between 50% and 60% more expensive to build, and that the glass case will cost between 40% and 50% more to manufacture.

If Apple should pass on all these cost increases to the buyer, the price of an iPhone could increase from $699 for the current iPhone 11 to around $1,200 for a 5G iPhone.

Of course, these prices are currently mere speculation – it’s not possible to accurately calculate the cost of such a device at the moment. What we do know though is that current 5G smartphones are all significantly more expensive than their earlier 4G counterparts.

Both the OnePlus 7 and Oppo Reno 5G cost more than their predecessors. For Apple, however, this is a huge gamble, because its smartphones already cost significantly more than its competitors’, and by adding 5G, they might simply become too expensive for the average phone buyer.

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