Will Apple's Switch To USB Type-C Impact It Financially? Explained

Apple made a major switch in its latest gadgets, including the iPhone that accounts for more than 80 per cent of the smartphone industry's profits. It is one of the most-talked-about thing in the tech world, since Apple earns a substantial revenue from the accessories that third party vendors make for its products. So, how does this change impact the revenue of Apple, one of the most profitable companies in the world.

How Apple earns through Lightning port?

Apple introduced Lightning port in 2012, with the launch of iPhone 5. It was a huge improvement compared to micro-USB interface, which was mainstream that time.

When accessory makers build peripherals and cables for iPhones, they need to apply for Apple's Made for iPhone (MIF) for certification. That certification is mandatory for an accessory to be sold through Apple's official retail channels.

Since the introduction of Lightning port more than a decade ago, Apple has earned tens of millions of dollars per quarter, according to a Bloomberg report.

Apple's official financial data has revealed that its revenue from wearable devices, home products and accessories has grown from $30.6 billion to $41.2 billion in the last three years.

"During the application process, the product design needs to be modified repeatedly until all the parameters are up to Apple's standards, which can take three to five months," The National Business Daily said in a report.

Then there are the fees that companies have to pay to Apple. In addition to Apple's $99 annual membership fee, manufacturers who apply for MFi certification also pay $2,060 per factory audit, according to the Science and Innovation Board Daily.

Additionally, Apple earns from the chip that's added to the Lightning cables.

Will switch to Type-C hurt Apple's revenue?

There are speculations that Apple's cash inflow will be affected after ditching to Lightning port. But some reports say the company may develop a certification chip specifically for the USB-C interface, which will be used in this year's iPhone 15 series phones and related MFI accessories.

So, it might be possible that the existing Type-C cables may not be recognised by the new iPhones, or is not able to fast-charge it.