Next iPhone, If 4G, Would Be Costly, Bigger, IHS Says

Apple’s next iPhone, rumored to be a 4G LTE model, will be “significantly more expensive to make” than the current iPhone, according to IHS’s Teardown Analysis Service. That’s leading analysts at IHS to speculate whether the next iPhone will be the expected 4G LTE model or something else.

Adding 4G LTE to the HTC ThunderBolt added $39.75 to the manufacturing cost, according to IHS’s teardown, representing a “major contribution to the ThunderBolt’s sizable bill of materials,” it said. At $262, the ThunderBolt holds the highest bill of materials cost of any smartphone IHS has broken down and rivals the expense of tablets, IHS said.

The iPhone’s printed circuit board would have to be larger to support a first-generation LTE baseband processor and supporting chipset, said Wayne Lam, senior analyst for IHS. But Apple may choose a different route, Lam said, citing comments made by Peter Oppenheimer, Apple chief operating officer, during the company’s April earnings call. “The first generation of LTE chipsets forced a lot of design compromises with the handset, and some of those we are just not willing to make,” Oppenheimer said during the call. Lam said that comment, in addition to IHS’s own teardown findings, indicate Apple may seek a more efficient semiconductor solution for adding LTE to the iPhone.

A more efficient solution for implementing LTE comes from Qualcomm, whose SnapDragon MSM8960, a successor to the MSM8655 used in the ThunderBolt, combines LTE, EVDO and HSPA into a single chip, Lam said. This integrated processor would eliminate the multiple baseband chipset approach used in the ThunderBolt and reduce the size and cost of making an LTE-enabled iPhone 5. The MSM8960 was not available when the ThunderBolt was in design, Lam said.

Even the newer MSM8960 would require additional components -- including power amplifiers, radio frequency components and switches -- which could add to the size, said Tina Teng, IHS senior analyst, wireless communications. The tradeoff could lead Apple to delay introduction of a 4G LTE phone, she indicated. “With Apple expected to focus on a thinner form factor for the next iPhone, it may not choose to implement LTE in its product rollouts this year because of these additional components,” she said. Qualcomm’s next-generation LTE solution is slated for introduction in 2012, which would allow Apple to produce an LTE-enabled iPhone at lower costs, she said. She said Apple would “likely be in a position to release this product” in Q2 2012.