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iPhone 5: 4G proving a cost issue?

With the iPhone 5 around the corner, many people have been asking what the new phone will offer to customers. Apple always maintain a tight press black out before a new product is released, but many analysts and tech sites have been taking educated guesses as to the hardware inside.

The HTC Thunderbolt received a lot of press attention when it was released and it has been an expensive product for HTC to release, especially when factoring in the cost of the 3G Long Term Evolution (LTE) wireless chips, which add almost $40 to the overall cost of the phone, according to industry research group IHS.

Many analysts have been reporting that Apple may not adopt 4G at all in their upcoming iPhone 5, partly due to the cost, and also because the technology has not yet been 100 proven in the field. Reading between the lines, Apple have already hinted at a Verizon press conference that it will be ‘conservative’ with the implementation of LTE. They say that there are aspects which haven’t meet their criteria, specifically battery life.

Other people say that Apple will need 4G in their upcoming Phone, especially if they wish to remain competitive with LG, HTC and Samsung, who already have it as an option in their new range.

A very expensive phone to make ....

There are also some technical difficulties, according to analyst, Wayne Lam. “First, the iPhone’s minuscule printed circuit board (PCB) will have to grow in size in order to support the first-generation LTE baseband processor as well as all the supporting chipset. Second, the next iPhone’s BOM value certainly will increase substantially compared to the iPhone 4 if LTE is implemented in the same manner as in the HTC Thunderbolt.”

With a cost of $171,35 to make right now, the new hardware would raise the costs to $211 per unit, lowering Apple’s profit margins. This would most likely be passed onto the customer.

Apple however have publicly stated that they don’t really like the current LTE designs, potentially meaning they will opt for another design, such as the SnapDragon MSM8960 which has advantages over the current 4G hardware.

Kitguru says: iPhone 5 is rumoured for release at the end of 2011.

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