At $599 for the base storage version, calling the iPhone 16e Apple’s low-cost offering would be absurd. However, the latest research reveals that the company has made sufficient efforts to reduce dependency on the likes of Qualcomm and other third-party suppliers, not just to obtain better control over the hardware, but also to reduce its materials cost. Compared to the previous-generation 2022 iPhone SE and the iPhone 16, the iPhone 16e boasts the highest percentage of in-house parts. Additionally, this model allows the California-based giant to rack up savings of $10 per unit thanks to the custom C1 5G modem, which might not seem like much, but let us dive into the broader details.
Apple can save up to $220 million on the iPhone 16e, all thanks to the C1 5G, assuming the company can reach its intended shipments target
Despite not supporting mmWave networks, the iPhone 16e’s C1 5G modem delivers impressive results against Qualcomm’s Snapdragon X71 found in the iPhone 16 family by achieving 40 percent better performance in some scenarios. Additionally, it is mass produced on TSMC’s 4nm process to allow for better efficiency, with the transceiver utilizing the older 7nm technology. The switch to an in-house baseband chip allows Apple to pocket an estimated $10 per unit, at least according to the research shared by Counterpoint Research.
Furthermore, the iPhone 16e flaunts 40 percent of the components made by Apple, with the remaining 60 percent sourced from third-party manufacturers. Even with these savings, the company managed to take some shortcuts on the total features count, as the handset ships with just a single rear camera, not to mention that it does not have MagSafe wireless charging. Whether Apple has decided not to pass these savings to customers, or it manages to reduce its expenditure on other product ranges, we cannot confirm at this time.
What we can inform you about is that, based on TF International Securities analyst Ming-Chi Kuo, Apple will ship around 22 million iPhone 16e units this year. With the C1 5G bringing in $10 savings for the technology giant, a whopping $220 million in component costs can be reduced. This advantage alone is why the Cupertino firm wants to transition to in-house wireless parts for future iPhone models as early as possible, and later this year, we could see the arrival of its first custom Wi-Fi 7 chip for the iPhone 17 series.
News Source: Counterpoint Research
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
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