Increase in Sapphire Display Cost May Restrict Production of Next iPhone
The supply chain sources at Apple assert it might be difficult for the giant to turn around large qualities of 5.5-inch iPhone into production. This is essentially due to rising cost of Sapphire as the display material. As stated by a report, the soaring cost of sapphire as one of the components required for production might be an obstacle in producing a scratch-resistant iPhone version.
Looking into the details of the report we observe that a sapphire display will cost around $280 which is a notable shoot up from $44 deployed for a 4-inch retina display in iPhone 5s. This extra expense of $236 will lead to a price escalation of an iPhone, eventually affecting the maximum retail price and heavily impacting the affordability point for the consumers.
The specs of sapphire screen cost indicates 1743 yuan or $280 which will raise the final cost of an iPhone to about 8000 yuan or $1285- a minimum in China. As per the current price, a 16GB iPhone 5s costs 5288 yuan in China $850, whereas the 64 GB is sold at 6888 yuan or $1106.
This speculation matches to an earlier report issued by analyst Ming-Chi Kuo, who stated supply constraints might compel Apple to include the sapphire display under a premium section of iPhone such as 64GB, 5.5-inch iPhone 6.
Despite the fact that sapphire is being deduced as an expensive raw material, Apple continues to source sapphire from third-parties, in parallel to setting up a production plant for manufacturing sapphire in small quantities at Arizona. The Arizona plant which is financed by Apple and run by GT advanced, is anticipated to produce approximately 100-200 million sapphire displays which should be enough for an entire range of devices when the plant will operate at a hundred percent capacity.