When Apple introduced the iPhone X last fall, it was clear to everyone the notch was the design compromise we need right now. The notch might not be pretty to look at, but it’s the only way to design a phone with an edge-to-edge screen right now. The notch is practically half a bezel that contains all the features you’d find on the top of a phone’s front side, including the camera, speakers, and sensors.
On the iPhone X, the notch houses a TrueDepth camera that can measure the depth of field to offer secure authentication — Face ID. A signature feature for the iPhone X, Face ID is going to be available on all phones going forward, including the three 2018 iPhones due this September. That’s what many rumors and leaks revealed so far, and we’ve got even more evidence to support them. In other words, if you’re like many people who passed on the iPhone X because you love Touch ID too much, get ready to bite the bullet if you plan to upgrade this year.
Looking at Lumentum’s financial performance for the June quarter and the guidance for the September quarter, Loup Ventures analyst Gene Munster concluded that Face ID would equip all three iPhones this year.
Lumentum, which makes 75% of the vertical-cavity-surface-emitting laser (VCSEL) component that goes in Face ID cameras to enable 3D sensing features needed for face recognition and augmented reality (AR), reported revenue of $301 million for the past quarter, $14 million than expected. 3D Sensing revenue accounted for $60 million to $65 million, which continues to be compressed due to seasonality. Even so, Munster says that’s a sign iPhone X demand is still healthy.
Going forward, Lumentum expects revenue of $340 million to $350 million in September, up from Street expectations of $336 million. At the end of June, Lumentum began increasing shipments to Apple, and the company anticipates orders to accelerate in the following two quarters. Munster says that a high percentage of these orders will go to Apple, even though some Android vendors may also get VCSEL components.
That’s why the analyst believes all three new iPhones will have Face ID features.
Given the sooner than expected ramp in VCSEL arrays, we believe this fall, Apple will have 3 (including iPhone X) iPhone models with the VCSEL laser. This should be a slight positive for ASP’s in Sep-18 and an increasingly positive in Dec-18 as production of these new phones ramps.
The research note says the ASP should top “the Street’s iPhone ASP in Sep-18 ($731) and Dec-18 ($790).”
Munster added that only the front cameras will get 3D sensors and that Apple remains committed to AR. Furthermore, he said that Apple would incorporate the technology into new product categories including the iPad. Recent discoveries in iOS code suggested that Apple is indeed working on an iPad Pro that will not feature a home button, which is a clear indication that Face ID is coming.
