Skip to main content

The iPhone SE’s $30 price bump looks like a pure 5G tax

The iPhone SE’s $30 price bump looks like a pure 5G tax


The era of the $400 iPhone is over

Share this story

Apple’s new iPhone SE was a predictable upgrade in almost every way except one: for the first time in the SE’s history, Apple has raised the price of its cheapest iPhone from $399 to $429, a $30 increase. 

And it’s almost definitely 5G’s fault. 

Price increases for 5G phones are common, even for Apple. When the company jumped from the iPhone 11 to the iPhone 12, it raised the price of the “standard” model from $699 to $829. But an estimate from Counterpoint Research shows where most of that cost increase came from, and it’s not the pricey OLED screen: 5G added $34 to the bill of materials compared to the 4G-only iPhone 11. In fact, a report from Fomalhaut Techno Solutions and Nikkei estimates Qualcomm’s 5G modem was the single most expensive component in Apple’s iPhone 12 lineup, contributing about $90 of the roughly $400 it cost Apple to build an iPhone 12 Pro. 

5G is expensive

But let’s talk about the $30 number because it’s the one that keeps popping up. $30 is how much extra you had to pay for a 5G-equipped iPhone 12 or iPhone 13 if you didn’t buy it from the right carriers in the US. It’s also the price increase from the $399 non-5G iPhone SE in 2020 to the $429 iPhone SE in 2022, and it’s estimated to be the premium Apple has to pay to put 5G into those phones. It’s almost as if Apple is simply just passing on the additional cost of building a 5G phone directly to customers. 

It’s not like Apple has a lot of choices, either. When it comes to 5G modems, Qualcomm is one of the only real options around, and everyone knows it.

There’s a reason, after all, that Apple sued Qualcomm over patent fees for the modems it used in its iPhones. And why Apple was willing to swallow its pride and pay up over $4 billion in a settlement a few years later. Apple had tried to switch over to Intel for modems, but it quickly became clear that Intel wasn’t going to work as a viable replacement — especially for the 5G modems that Apple needed.

Apple is trying to change that. It paid a cool $1 billion for Intel’s 5G modem business and has spent the last several years gearing up to build its own cellular components — modems that may start to pop up in new iPhones as soon as next year. Unfortunately, those Apple-built modems aren’t ready yet, leaving the company once again stuck with Qualcomm’s hardware instead.

There may be other entirely different reasons why Apple’s charging $30 more this year: the ongoing semiconductor shortage impacting various components or other economic factors, like rising inflation or supply chain issues, could also be impacting the price beyond just 5G. Or Apple might just have looked at the fact that customers didn’t seem too fazed by the $30 price increase from the iPhone 12 and iPhone 13 and realized that it simply could just charge $30 more for the SE, too. 

But the facts remain: historically, adding 5G to an iPhone is a significant cost factor to Apple, and the addition of 5G is the single biggest change between the 2020 and 2022 iPhone SE models.

There is a possible silver lining here: with Apple looking to move away from Qualcomm’s modems and to its own modems, there’s the chance that Apple will be able to start to defray some of the cost of the 5G components in its future phones down the line. That could mean that some future version of the iPhone SE could eventually return to its original $399 price point that Apple has maintained since 2016.

On the other hand, if Apple does manage to get customers onboard $429 floor for iPhones (with sales to match), it’s hard to imagine that the company would bring the price down in the future. After all, you don’t become a $3 trillion company by leaving money on the table.

Today’s Storystream

Feed refreshed 51 minutes ago The tablet didn’t call that play by itself

External Link
Andrew J. Hawkins51 minutes ago
Vietnam’s EV aspirant is giving big Potemkin village vibes

Idle equipment, absent workers, deserted villages, an empty swimming pool. VinFast is Vietnam’s answer to Tesla, with the goal of making 1 million EVs in the next 5-6 years to sell to customers US, Canada and Europe. With these lofty goals, the company invited a bunch of social media influencers, as well as some auto journalists, on a “a four-day, multicity extravaganza” that seemed more weird than convincing, according to Bloomberg. Guests were treated to a champagne and lobster lunch, but also were left wondering why none of VinFast’s machinery was working. They even got to visit the company’s real estate holdings outside Hanoi, where they were greeted by empty swimming pools, dusty construction equipment, and a library devoid of books.

James VincentAn hour ago
Today, 39 years ago, the world didn’t end.

And it’s thanks to one man: Stanislav Petrov, a USSR military officer who, on September 26th, 1983, took the decision not to launch a retaliatory nuclear attack against the US. Petrov correctly guessed that satellite readings showing inbound nukes were faulty, and so likely saved the world from nuclear war. As journalist Tom Chivers put it on Twitter, “Happy Stanislav Petrov Day to those who celebrate!” Read more about Petrov’s life here.

Soviet Colonel who prevented 1983 nuclear response
Photo by Scott Peterson/Getty Images
The Verge
James VincentAn hour ago
Deepfakes were made for Disney.

You might have seen the news this weekend that the voice of James Earl Jones is being cloned using AI so his performance as Darth Vader in Star Wars can live on forever.

Reading the story, it struck me how perfect deepfakes are for Disney — a company that profits from original characters, fans' nostalgia, and an uncanny ability to twist copyright law to its liking. And now, with deepfakes, Disney’s most iconic performances will live on forever, ensuring the magic never dies.

External Link
Elizabeth LopattoTwo hours ago
Hurricane Fiona ratcheted up tensions about crypto bros in Puerto Rico.

“An official emergency has been declared, which means in the tax program, your physical presence time is suspended,” a crypto investor posted on TikTok. “So I am headed out of the island.” Perhaps predictably, locals are furious.

Welcome to the new Verge

Revolutionizing the media with blog posts

Nilay PatelSep 13
The Verge
Richard LawlerTwo hours ago
Teen hacking suspect linked to GTA 6 leak and Uber security breach charged in London.

City of London police tweeted Saturday that the teenager arrested on suspicion of hacking has been charged with “two counts of breach of bail conditions and two counts of computer misuse.”

They haven’t confirmed any connection with the GTA 6 leak or Uber hack, but the details line up with those incidents, as well as a suspect arrested this spring for the Lapsus$ breaches.

The Verge
Richard Lawler1:00 PM UTC
Green light.

Good morning to everyone, except for the intern or whoever prevented us from seeing how Microsoft’s Surface held up to yet another violent NFL incident.

Today’s big event is the crash of a NASA spaceship this evening — on purpose. Mary Beth Griggs can explain.

David Pierce12:54 PM UTC
Thousands and thousands of reasons people love Android.

“Android fans, what are the primary reasons why you will never ever switch to an iPhone?” That question led to almost 30,000 comments so far, and was for a while the most popular thing on Reddit. It’s a totally fascinating peek into the platform wars, and I’ve spent way too much time reading through it. I also laughed hard at “I can turn my text bubbles to any color I like.”

Thomas Ricker10:44 AM UTC
The Simpsons pays tribute to Chrome’s dino game.

Season 34 of The Simpsons kicked off on Sunday night with an opening credits “couch gag” based on the offline dino game from Google’s Chrome browser. Cactus, cactus, couch, d’oh! Perfect.

Thomas Ricker7:29 AM UTC
Table breaks before Apple Watch Ultra’s sapphire glass.

”It’s the most rugged and capable Apple Watch yet,” said Apple at the launch of the Apple Watch Ultra (read The Verge review here). YouTuber TechRax put that claim to the test with a series of drop, scratch, and hammer tests. Takeaways: the titanium case will scratch with enough abuse, and that flat sapphire front crystal is tough — tougher than the table which cracks before the Ultra fails — but not indestructible.

Emma RothSep 25
Rihanna’s headlining the Super Bowl Halftime Show.

Apple Music’s set to sponsor the Halftime Show next February, and it’s starting out strong with a performance from Rihanna. I honestly can’t remember which company sponsored the Halftime Show before Pepsi, so it’ll be nice to see how Apple handles the show for Super Bowl LVII.

Emma RothSep 25
Starlink is growing.

The Elon Musk-owned satellite internet service, which covers all seven continents including Antarctica, has now made over 1 million user terminals. Musk has big plans for the service, which he hopes to expand to cruise ships, planes, and even school buses.

Musk recently said he’ll sidestep sanctions to activate the service in Iran, where the government put restrictions on communications due to mass protests. He followed through on his promise to bring Starlink to Ukraine at the start of Russia’s invasion, so we’ll have to wait and see if he manages to bring the service to Iran as well.

External Link
Emma RothSep 25
We might not get another Apple event this year.

While Apple was initially expected to hold an event to launch its rumored M2-equipped Macs and iPads in October, Bloomberg’s Mark Gurman predicts Apple will announce its new devices in a series of press releases, website updates, and media briefings instead.

I know that it probably takes a lot of work to put these polished events together, but if Apple does pass on it this year, I will kind of miss vibing to the livestream’s music and seeing all the new products get presented.

External Link
Emma RothSep 24
California Governor Gavin Newsom vetoes the state’s “BitLicense” law.

The bill, called the Digital Financial Assets Law, would establish a regulatory framework for companies that transact with cryptocurrency in the state, similar to New York’s BitLicense system. In a statement, Newsom says it’s “premature to lock a licensing structure” and that implementing such a program is a “costly undertaking:”

A more flexible approach is needed to ensure regulatory oversight can keep up with rapidly evolving technology and use cases, and is tailored with the proper tools to address trends and mitigate consumer harm.