The transition to 5G is a big reason why Apple might be looking for cost savings by including fewer accessories with its phones
Apple explained excluding wall chargers and earbuds from new iPhone 12 boxes as a step to "save the planet" as they would lead to less mining, packaging, and planet-heating carbon dioxide emissions associated with making the products.
Surely this is a good business decision for Apple but just how good it will be for the planet is harder to see, reports The Verge on a feature report.
The first argument that came from the industry experts is that the move saves the company money, but some of the environmental benefits could be offset by people buying earbuds and chargers separately.
"They sold this as kind of an environmental friendly rule," says Angelo Zino, a senior industry analyst with investment research firm CFRA Research. But Apple's waste-cutting move is also a good financial move. "Clearly the bottom line has a lot to do with it."
The transition to 5G is a big reason why Apple might be looking for cost savings by including fewer accessories with its phones, tech analysts tell The Verge. For the first time, Apple's entire line of new phones will support 5G. That makes it more expensive to make the iPhone 12 compared to the iPhone 11 because the components that enable 5G speeds are more complex and costly.
Zino estimates that the radio frequency components alone in the new iPhone 12 are going to cost 30 to 35 percent more than they did in earlier iPhones. "Apple is going to look to cut costs in other aspects of the phone," he says.
Deciding not to include a power block and AirPods with a new phone is one way to do that. That might only increase the company's gross profit per phone by a little over 1 percent, says Gene Munster, a managing partner at venture capital firm Loup Ventures. But it's something. "I would just generally think about this as a maneuver to maintain the current profitability of the phone," Munster says.
A company making a production choice that's good for business and good for the planet seems like a win-win. But Apple is assuming that the people buying the new iPhone already have old headphones and chargers ready to use instead.
If people decide to buy AirPods anyway because they don't already have earbuds, that's a big win for Apple but not for the planet. If Apple sells roughly the same number of phones this year as it did in 2018 — about 217 million — and just 5 percent of those people decide to add AirPods to their cart, the company stands to make an additional $700 million in gross profit, according to Munster.
The problem is that buying chargers or headphones separately could mean more packaging waste and emissions from separate deliveries. Some of that might add to Apple's carbon footprint, and some of it might get tacked on to different companies' carbon footprints if consumers decide to buy the accessories from other vendors. That doesn't necessarily reduce emissions overall; it just spreads the greenhouse gasses around between different companies.
"This is going to be a huge boon, at least in the short term, to accessory makers who are going to be selling USB-C chargers," says Avi Greengart, founder and lead analyst at consultancy Techsponential.
That's because the cable that is included with the iPhone 12 isn't compatible with the power blocks included with many previous iPhones. Consumers who don't have a compatible charger lying around will need to purchase a USB-C wall charger or wireless charger in order to use their new phones.
Instead of taking this step, the company would have a bigger impact if it made its products easier to refurbish so that they don't become "obsolete and junk after a few years," said Scott Cassel, CEO of the nonprofit Product Stewardship Institute, said in an email to The Verge.
Apple's AirPods, for example, tend to have a shorter shelf life than traditional headphones because it's so hard to replace the lithium-ion battery inside.
This particular announcement was one of the smaller steps that Apple has taken to up its environmental game. In July, it pledged to zero-out its carbon emissions by 2030 and debuted a new robot named "Dave" to disassemble old iPhones and recover materials that can be used again.
Despite the controversy, the company also got kudos from some environmental groups for cutting back on e-waste, a growing problem that Apple contributes to with its constant stream of new gadgets. This week's announcement is the latest move Apple has made to become a more environmentally friendly company, and it follows a big pledge it made in July to curb greenhouse gas emissions.