Apple supplier Lumentum has received over $200 million in bookings for the rest of the 2017 calendar year, related to components for vertical-cavity surface-emitting lasers (VCSEL), believed to be aimed at Apple's advanced 3D sensing camera on the iPhone 8. The bookings represent a noticeable increase in revenue for the supplier, in comparison to a reported $5 million in 3D sensing revenue during its last fiscal quarter.
Because of this, LoupVentures analyst Gene Munster believes that the September launch of the iPhone 8 will see an increase in the number of iPhones with advanced 3D sensors supporting augmented reality applications. Lumentum is believed to be one of around three companies supplying Apple with VCSEL components, as well as Finisar.
It's predicted that most of Lumentum's $200 million VCSEL order, "if not the entire order," will be for Apple, leading to further confirmation that AR will be a "focus feature" of the iPhone 8. This "massive" uptick in production has seen Lumentum increase its VCSEL production capacity by 25 to 30 percent more than it had projected as recently as the last quarter.
In the June-qtr, Lumentum recorded $5M in 3D sensing revenue, but more impressively they received over $200M in bookings in the quarter, which they believe will all be shipped by CY17. We believe the majority, if not they entire order, is all being shipped to Apple. We believe these comments further confirms 3D sensing (and in-turn AR applications) will be a focus feature in the next iPhone.
In addition, Lumentum highlighted they have increased VCSEL laser capacity by 25 – 30% from what they anticipated only one quarter ago. Given the uptick in Management’s demand forecast, we believe advanced 3D sensing capabilities will be integrated in more iPhones that what most were previously expecting.
Furthermore, LoupVentures believes that the iPhone launch "remains on track" for release in September, with a total 133 million units of new iPhone devices shipping in the second half of 2017. Of those, 55 million (43 percent) will have VCSEL components, related to the next-generation OLED iPhone 8 device. Next year, as more VCSEL production is added, it's predicted that as much as 85 percent of new iPhones shipped in the second half of 2018 will support 3D sensing abilities.
For the other two devices coming in 2017 -- the "iPhone 7s" and "iPhone 7s Plus" -- it's not expected that 3D sensing features supported by advanced VCSEL components will be added. The iPhone 8 will remain the central showpiece device in the new line of iPhones in 2017, particularly with the help from developers creating new experiences in apps fueled by ARKit.
Recent production ramp-up stories have pegged all three new iPhones as entering volume production ahead of their launch in September. Currently, it's expected that the LCD iPhone 7s and iPhone 7s Plus will be fairly easy for customers to obtain, but the OLED iPhone 8 "could fall short of demand" and be difficult to purchase for the first few months of its availability.
