Apple’s iPhone may not see a significant upgrade to its camera lenses until at least 2022. A price dispute between suppliers may impact advancement, as indicated by Apple analyst Ming-Chi Kuo in a recent research note.
According to Kuo, suppliers Genius Electronic Optical and Largan are engaged in a price war that could affect the profitability of each respective supplier. As reported by MacRumors, Genius Electronic Optical is placed at high risk due to the supplier’s reliance on Apple while Largan may be unwilling to cut prices. Adding to this, Sunny Optical is entering the fray as it enters Apple’s supply chain.
In his research note, Kuo states:
We predict that Largan will bargain the ASP of iPhone mid-to-high-end lenses by about 15-25% in 1H21 in order to increase its capacity utilization rate. Yujingguang’s [Genius Electronic Optical’s] order proportion, capacity utilization rate and gross profit margin will be directly affected. The impact of the price war will begin in January 2021, and Yujingguang’s January revenue may only grow in single-digit YoY or even decline.
Kuo then goes on to predict that as a result, there will be “no significant upgrade of the camera lens in 2022”. The hurdles Genius Electronic Optical faces can potentially have an effect on iPhone’s camera lenses for years “unless the structural challenges of the lens industry are significantly improved or Yujingguang can significantly reduce its dependence on Apple orders.”
Genius Electronic Optical has been a key supplier in Apple’s supply chain for quite some time. Last year, the supplier faced quality issues regarding its camera lenses. Upon discovery, Apple began relying more heavily on Largan as the company was able to fulfill orders that passed quality assurance.
Although Apple’s next iPhone may not have a significant upgrade to its camera lenses, Apple will likely lean on software improvements as an alternative. While the lenses may stay the same with the new flagship device, new camera features and quality of life improvements could be implemented to enhance the iPhone’s camera set up.