Apple is expected to launch the iPhone 13 series in September with a smaller notch and a higher refresh rate. While the external design is pretty similar to the current iPhone 12 models, it is being reported that the iPhone 13 will increase in price due to the increased cost of chip production.
Apple to Likely Increase iPhone 13 Price Due to Increased Cost of Chip Production
According to a new report from DigiTimes, TSMC is planning to increase the cost of its chip manufacturing. This will ultimately have an impact on its customers, majorly Apple. Apple, on the other hand, will pass on the increased cost to customers unless it sees fit to keep it the same. TSMC could increase its cost by 20 percent for its "advanced and mature process technologies." Moreover, the cost changes are expected to be implemented in January.
TSMC has reportedly notified customers of price increases by as much as 20% for its advanced and mature process technologies, with the new prices set to be effective starting January 2022. The price adjustments will also be for the orders scheduled to be fulfilled starting December.
For TSMC's advanced sub-7nm process technologies, quotes will rise by 3-10%, the sources indicated. Apple, the biggest client of TSMC with its orders accounting for over 20% of the foundry's total wafer revenue, will experience a 3-5% price hike, the sources said.
To compensate for the increase in chip production cost, Apple will increase the price of its forthcoming iPhone 13 models. This will allow Apple to eliminate the impact of higher costs on its profits. While Apple is facing a dilemma, it was previously reported that chip shortage will have an impact on "everybody but Apple." While it is not about chip shortage, Apple will have to increase the price of its iPhone 13 models.
While facing rising production costs, brand vendors may end up passing the costs onto end-market customers, the observers said.
Apple is likely to set higher prices for its upcoming iPhone and other series, according to market sources. Multiple notebook brand vendors, which have raised their prices by 5-10% so far this year, continue to explore ways to mitigate the impact of rising costs on their profitability.
Apple is planning on bringing a lot of major changes with the iPhone 13 series. It is expected that the forthcoming devices will boast better camera sensors for professional photographers, a higher refresh rate display, faster A15 Bionic processors, and a smaller notch. It was previously rumored that Apple will hold an event on September 17 for the iPhone 13 launch and another event will be held on September 30.
There you have it, folks. Do you think Apple will increase the price of the iPhone 13 models given it will have to pay more for the chip production? Let us know in the comments.