Yesterday saw the news that Apple chip supplier TSMC is set to increase how much it charges for the silicon that goes into iPhones. It's thought that could, in turn, impact the price we pay for those iPhones, starting with the upcoming iPhone 13 lineup. That's bad news for customers looking to grab themselves a new iPhone —but it could be worse than that. The majority of Apple's products might see price bumps, too.
The important thing to remember about TSMC is that it makes a lot of chips for Apple, not just the A-series chips that go into iPhones. TSMC produces the chips that go into Apple's iPads, while the M-series chips that power newer Macs are also built by TSMC.
There's more, too. Apple Watches run on silicon built by TSMC, not to mention Apple TV. Even HomePod mini might not be safe from what DigiTimes believes will be a chip price hike of up to 5%. That's the price TSMC charges Apple, its biggest customer, of course. We don't know how much of that price increase will be passed on to customers — if at all.
DigiTimes does believe that Apple will pass on at least some of the extra costs, though. If accurate, we should expect iPhone 13 to cost more than the $799 of iPhone 12, although the increase will likely be relatively small. Even if Apple passed along the full 5% increase, that's on the price of the chip itself — not the entire device.
Don't expect Apple to add $100, is what I'm saying. Reports from last year had the A14 Bionic chipset costing around $40 per device, so a 5% increase would only be around $2.
It will, of course, be a similar story across the rest of Apple's products, too. Except not all devices use chips as costly as the one the latest and greatest iPhone uses. Macs might be a slightly different story, but we already know that M-series chips are modified versions of the A-series chips we've seen for years. Again, huge price increases seem highly unlikely.
With TSMC's new pricing not set to kick in until January, it's likely Apple will get ahead of the curve and make changes to the price of new products now, starting with iPhone 13. If that's the case, we can expect some answers within a matter of weeks — iPhone 13 is expected to be announced in the middle of September, after all.
No matter the price, we can all agree that the new iPhones will be the best iPhones ever, and price increase or not, they'll still sell well.
Except for iPhone 13 mini, possibly!
Oliver Haslam has written about Apple and the wider technology business for more than a decade with bylines on How-To Geek, PC Mag, iDownloadBlog, and many more. He has also been published in print for Macworld, including cover stories. At iMore, Oliver is involved in daily news coverage and, not being short of opinions, has been known to 'explain' those thoughts in more detail, too.
Having grown up using PCs and spending far too much money on graphics card and flashy RAM, Oliver switched to the Mac with a G5 iMac and hasn't looked back. Since then he's seen the growth of the smartphone world, backed by iPhone, and new product categories come and go. Current expertise includes iOS, macOS, streaming services, and pretty much anything that has a battery or plugs into a wall. Oliver also covers mobile gaming for iMore, with Apple Arcade a particular focus. He's been gaming since the Atari 2600 days and still struggles to comprehend the fact he can play console quality titles on his pocket computer.
“Reports from last year had the A14 Bionic chipset costing around $40 per device, so a 5% increase would only be around $2.” So in other words, this is a nothing story. Apple could EASILY absorb this tiny price increase from TSMC. Besides, these things are priced at $599, $699, $1099 etc. Do you really think the price will go up $2? Or $10? Or $25?
More than likely they will bump them up like $50 or so. Maybe keep the pro line at the same price and bump up the cheaper non-pro models by $50.
Apple "Well our prices rose 5%, so since we are such a kind and generous company, instead of raising the price of the iPhone by $42, we will just make it an even $50." Gotta keep those sky-high profit margins...
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