Apple (AAPL) - Get Report will try to offset higher manufacturing costs for this year’s iPhones by shipping them without a pair of accessories that come with current models, according to the latest report from analyst Ming-Chi Kuo.
Kuo, who has a good (though not perfect) record when it comes to breaking news about future Apple products, says that Apple’s 2020 iPhones won’t ship with either wired earbuds (EarPods) or a power adapter. He doesn’t state whether Apple will still bundle a Lightning cable.
The report arrives a few days after one from research firm Barclays that (citing talks with Apple suppliers) also forecast this year’s iPhones won’t ship with EarPods, adding that they might not ship with a power adapter.
Kuo attributes Apple’s decision to a desire to offset the cost of including 5G radios -- they stand to increase Apple’s modem and RF front-end component costs -- within all its newest iPhone models. In addition, reducing the size and weight of iPhone boxes could allow Apple to save on shipping costs, and the company could argue that its actions serve to reduce electronics waste.
Currently, the iPhone 11 Pro and Pro Max ship with an 18-watt power adapter that relies on the relatively new USB-C interface. All other iPhones dating back to the iPhone 5, including the regular iPhone 11, ship with a 5-watt adapter that relies on the standard USB interface. Kuo believes Apple plans to discontinue both adapters in favor of separately selling a new 20-watt adapter.
Apple currently sells its 18W USB-C adapter for $29 on a standalone basis, while Amazon.com (AMZN) - Get Report sells it for $20. A host of iPhone-compatible power adapters, including some that come with a USB-C to Lightning cable and/or multiple charging ports, are also available from third parties; they’re generally priced from $10 to $25 on Amazon.
With the lion’s share of new iPhone sales coming from consumers upgrading an existing model, Apple might be wagering that most buyers of its 2020 iPhones will already have a power adapter that they can plug their new iPhone into. Also possibly factoring into Apple’s decision-making: A portion of its iPhone base prefers to use something other than its stock wired chargers to power their iPhones, such as a wireless charging pad or a multi-port, third-party charger.
It’s not too hard to decipher why Apple might choose to stop shipping EarPods with new iPhones: Wireless headphone sales in general, and AirPods sales in particular, have taken off. A week ago, Kuo forecast that AirPods shipments would rise 65% in 2020 to 93.8 million.
Also, since EarPods (like USB chargers) have long been shipped with iPhones, most upgrading iPhone buyers will already have at least one pair.
Apple’s 2020 iPhone lineup is expected to feature 6.1-inch and 6.7-inch flagship models that would succeed the iPhone 11 Pro and Pro Max, along with cheaper 5.4-inch and 6.1-inch models that would succeed the standard iPhone 11. All four models are expected to sport OLED displays, and the flagship models might also feature (like Apple’s latest iPad Pros) a LIDAR scanner that works with their rear cameras to enable new augmented reality features and improved depth-of-field effects.
Due to disruptions caused by the COVID-19 pandemic, Apple’s 2020 iPhones might be shipping a little late. Earlier in June, chip supplier Broadcom (AVGO) - Get Report indicated that this year’s iPhone production ramp will start later than usual. Barclays, for its part, estimates that the mass-production of new iPhones will start four to six weeks later than it typically has this year.