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In October 2020, Barclays warned that the iPhone 12 lineup could put pressure on Apple’s gross-margin percentage and average selling price (ASP). Its thesis was that more expensive 5G hardware and a shift toward lower-priced models could outweigh savings from removing the power adapter and EarPods. Both outcomes were forecasts, not confirmed Apple figures: Apple does not report exact margins or ASP for each iPhone model.
What “lower margin” and “lower ASP” mean
These measures describe different parts of the economics. Gross margin is the share of revenue remaining after direct product costs; gross profit per phone is the dollar difference between revenue and those costs. ASP is the weighted average revenue per iPhone sold, so it can move when the mix of models and storage configurations changes.
| # | Preview | Product | Price | |
|---|---|---|---|---|
| 1 |
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Apple iPhone 12, 64GB, Black - Unlocked (Renewed) | $185.00 | Buy on Amazon |
| 2 |
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Apple iPhone 12, 128GB, Blue - Unlocked (Renewed) | $217.00 | Buy on Amazon |
| 3 |
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Apple iPhone 12, 128GB, Black - Unlocked (Renewed) | $222.99 | Buy on Amazon |
| 4 |
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Apple iPhone 12 Mini, 64GB, Black - Unlocked (Renewed) | $158.00 | Buy on Amazon |
| 5 |
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Apple iPhone 12 Mini, 64GB, Blue - Unlocked (Renewed) | $165.28 | Buy on Amazon |
- Lower ASP does not necessarily mean a price cut. If more customers buy less expensive models, the average can fall even when individual list prices are unchanged.
- Lower gross-margin percentage does not necessarily mean lower total gross profit. Selling more phones can raise total gross-profit dollars even if the percentage earned on each dollar of revenue declines.
Apple does not disclose per-model gross margins or a definitive iPhone 12-family ASP, so Barclays’ October 2020 view should be read as an analyst forecast, not a reported result. 9to5Mac’s account of the Barclays forecast and contemporary analysis of the margin and ASP risks describe the concern.
Why the iPhone 12 could cost more to build
The 2020 iPhone 12 family added 5G, and the standard iPhone 12 and mini received OLED displays. The Pro models also started with 128GB of storage, up from 64GB on the preceding Pro generation. The A14 chip and its 5-nanometer manufacturing were additional elements of the new hardware package. These changes could raise costs even if retail prices held steady.
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5G, including U.S. mmWave models
5G required a modem and radio-frequency components; U.S. models supporting mmWave needed additional radio hardware compared with sub-6GHz configurations. Ming-Chi Kuo estimated that 5G components could add roughly $75–$125 per device, depending on configuration. That is an analyst estimate, not a cost figure Apple disclosed. The report on Kuo’s estimate gives the attribution.
Counterpoint Research later estimated a bill of materials (BOM) of nearly $415 for a 128GB iPhone 12 under an assumed 38% mmWave mix, about 21% higher than for the comparable iPhone 11. This is a component-material estimate under stated assumptions, not the phone’s complete manufacturing cost or Apple’s cost of goods sold. It does not by itself establish a gross margin. Counterpoint’s BOM analysis explains the comparison.
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- Fully unlocked and compatible with any carrier of choice (e.g. AT&T, T-Mobile, Sprint, Verizon, US-Cellular, Cricket, Metro, etc.).
- Inspected and guaranteed to have minimal cosmetic damage, which is not noticeable when the device is held at arm's length.
- Successfully passed a full diagnostic test which ensures like-new functionality and removal of any prior-user personal information.
- The device does not come with headphones or a SIM card. It does include a charging cable that may be generic.
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OLED and storage across the lineup
OLED displays became part of the standard iPhone 12 and mini as well as the Pro range. That brought a costly display technology to models priced below the Pro tier. Higher base storage on the Pro models also meant more NAND flash in their entry configurations. Those pressures mattered alongside 5G: the question was not simply whether each component cost more, but how the added cost compared with each model’s selling price.
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Apple stopped including the power adapter and EarPods with the iPhone 12, citing environmental considerations. Removing accessories and packaging can reduce costs, but Apple did not publish a simple per-phone savings figure for the change. Barclays’ concern was that any savings would not fully offset the added 5G and radio hardware, OLED panels, and higher storage. Without an official saving or model-level cost disclosure, the size of that offset cannot be calculated from public figures.
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- Fully unlocked and compatible with any carrier of choice (e.g. AT&T, T-Mobile, Sprint, Verizon, US-Cellular, Cricket, Metro, etc.).
- Inspected and guaranteed to have minimal cosmetic damage, which is not noticeable when the device is held at arm's length.
- Successfully passed a full diagnostic test which ensures like-new functionality and removal of any prior-user personal information.
- The device does not come with headphones or a SIM card. It does include a charging cable that may be generic.
- Tested for battery health and guaranteed to have a minimum battery capacity of 80%.
How ASP could fall without across-the-board price cuts
At U.S. launch, the reported starting prices were $699 for iPhone 12 mini, $799 for iPhone 12, and $999 for iPhone 12 Pro; carrier and activation conditions could apply. These were U.S. prices, not a global price comparison. The lower-priced models offered major new-generation features, including 5G and OLED, at a lower entry point than the Pro models. Barclays expected that buyers might favor the mini and standard iPhone 12 over Pro versions, reducing the lineup’s weighted ASP. The contemporary pricing analysis reports those launch starting prices and the mix concern.
ASP can also be affected by storage choice, carrier promotions, regional pricing and the continued sale of older, cheaper iPhones. A customer choosing a base-storage Pro instead of a higher-capacity version can lower the average just as a shift from Pro to standard models can. Apple did not publish the iPhone 12 model mix needed to establish how much any of these factors changed actual ASP.
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- This phone is unlocked and compatible with any carrier of choice on GSM and CDMA networks (e.g. AT&T, T-Mobile, Sprint, Verizon, US Cellular, Cricket, Metro, Tracfone, Mint Mobile, etc.).
- Please check with your carrier to verify compatibility.
- When you receive the phone, insert a SIM card from a compatible carrier. Then, turn it on, connect to Wi-Fi, and follow the on screen prompts to activate service.
- The device does not come with headphones or a SIM card. It does include a generic (Mfi certified) charging cable.
- Tested for battery health and guaranteed to have a minimum battery capacity of 80%.
Why the margin risk was sharper on lower-priced models
A given increase in component cost takes a larger share of revenue on a $699–$799 phone than on a $999-or-higher Pro. Yet pricing the standard models accessibly could encourage adoption of 5G and OLED. If lower-priced models took a greater share of sales, the lineup’s blended margin could be pressured even if every model remained profitable. Apple’s model-level margins are not public, so it is not possible to say which iPhone 12 model had the highest margin.
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Barclays emphasized the risk that model mix would tilt toward lower-priced phones. Morgan Stanley’s AlphaWise work offered a more optimistic counterpoint: it treated 5G as a significant purchase driver and modeled an iPhone ASP base case of $775 and a higher case of $842. Those are forecast scenarios, not realized Apple ASP figures. Strong demand could support sales and a more favorable mix, so the forecast was not one-sided. Morgan Stanley’s AlphaWise analysis sets out those scenarios.
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- This phone is unlocked and compatible with any carrier of choice on GSM and CDMA networks (e.g. AT&T, T-Mobile, Sprint, Verizon, US Cellular, Cricket, Metro, Tracfone, Mint Mobile, etc.).
- Please check with your carrier to verify compatibility.
- When you receive the phone, insert a SIM card from a compatible carrier. Then, turn it on, connect to Wi-Fi, and follow the on screen prompts to activate service.
- The device does not come with headphones or a SIM card. It does include a generic (Mfi certified) charging cable.
- Tested for battery health and guaranteed to have a minimum battery capacity of 80%.
Carrier subsidies and promotions can also affect consumer demand and the effective price paid. Apple’s fiscal 2020 earnings-call material discussed carrier subsidies, but such arrangements should not be treated as identical to an increase in the price Apple receives for each phone. The earnings-call material provides that context.
Margin percentage is not the same as total profit
Suppose, purely as an illustration and not an Apple result, that a Pro model produces more gross profit per unit than a less expensive model. If the lower-priced model sells in much greater volume, the lineup’s ASP and blended margin percentage could decline while total revenue and gross profit dollars rise. The outcome depends on units sold, model mix, costs, and realized selling prices—not the margin percentage alone.
Apple could also value a larger installed base for future services and accessory sales. Those potential benefits do not prove that the iPhone 12’s initial hardware economics improved; they explain why a company might accept pressure on hardware margin in exchange for adoption or longer-term customer value.
Quick Recap
What the public evidence can—and cannot—establish
- Barclays warned in October 2020 that iPhone 12 margins and ASP could face pressure; that was an analyst thesis, not Apple guidance.
- External BOM and component estimates indicate plausible cost pressure, but neither establishes Apple’s complete per-phone costs or gross margin.
- Apple did not provide an exact charger-removal saving, iPhone 12 model mix, or model-level margin and ASP figures in the cited material.
- The $699, $799, and $999 starting prices cited above refer to U.S. launch pricing; promotions and other markets can differ.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
