Apple plans to launch a new 5.85-inch OLED iPhone this year as an upgrade to the existing iPhone X, but the vendor has managed to reduce the new device's initial manufacturing bill of materials (MBOM) to a level much lower than that of its present flagship model, according Digitimes Research senior analyst Luke Lin.

Lin cited information from Apple's upstream supply chain as indicating that the new device's MBOM will be more than 10% lower than that for iPhone X. He added that the MBOM of the iPhone X was more than US$400 in 2017.

Apple has recently determined the direction for its next-generation iPhone lineup - which will consist of two OLED-based iPhones (5.85-inch and 6.45-inch) and a 6.1-inch LCD model. Thanks to the cost reduction, Apple may position the new 5.85-inch device as the cheapest model of all three next-generation iPhone models, Lin believes.

Another project to develop a 5.85-inch LCD iPhone has been suspended since the end of the Lunar New Year holidays in mid-February and may be eventually terminated, Lin said.

Apple previously planned to release the LCD version instead of the OLED one in the 5.8-inch segment due to MBOM concerns. Apple's decision hinged on the cost of the OLED panels, Lin pointed out.

Because of the iPhone X's weak demand, Apple pulled in a lot less OLED panels from Samsung Display than it had committed, giving the Korea-based panel supplier more bargaining chips in their negotiation over the OLED panel quotes for the next-generation iPhones.

However, Apple has recently reached an agreement with Samsung Display, securing satisfactory terms that will prevent cost increases from the panel side, Lin noted.

For the new lineup, Lin believes the 5.85-inch OLED iPhone may be the cheapest of the three new devices, as some of the smartphone's recent engineering samples have adopted components with lower-level specifications or lower capacities than those of the 6.1-inch LCD iPhone with LPDDR memory being one of the major differences.

Source: digitimes