In a new note, he’s saying that this is still expected, and will be made possible by improved manufacturing yields on the part of tetraprism lens assembly supplier, Largan …
iPhone 16 Pro periscope lens
Kuo first made the prediction back in March, a long way ahead of the launch of the iPhone 15.
Kuo said on Tuesday that Apple already plans to put the periscope lens on the smaller Pro model as well. This won’t happen with the iPhone 15 Pro, but with the iPhone 16 Pro in 2024. Kuo heard from sources familiar with Apple’s supply chain that iPhone 16 Pro will get a slightly larger display. This will allow the company to fit the periscope lens on both models, not just the Pro Max.
Kuo reaffirmed his months-old claim that there will be “two iPhone 16 Pro models adopting tetraprism lenses” in 2024. Apparently the iPhone 15 Pro Max helped Largan hit a 46-month revenue high that’s expected to continue into Q1 next year.
Improved lens assembly yields
In a new note today, Kuo echoes his prediction. He said that periscope lens supplier Largan originally struggled with very low yield rates (the percentage of modules which passed quality assurance checks), but has now significantly improved these.
Largan is the exclusive supplier of the tetraprism (periscope) camera lens for the iPhone 15 Pro Max. Apple’s urgent spec upgrades led to a production yield of only about 40% in 3Q23, resulting in negative gross margins and dragging down 3Q23 EPS.
However, my latest survey indicates that Largan has now improved the yield to 70% or more significantly, making the tetraprism lens assembly profitable and materially accretive to EPS in 4Q23 […]
Apple is expected to include a tetraprism camera in the iPhone 16 Pro, leading to a 160% YoY growth in iPhones with this camera in 2024.
Strong demand for the iPhone 15 Pro Max has seen Largan enjoy increased orders for the lens assembly, which will further help with profitability as the development costs are spread across more units.
Back in the days when Kuo worked for KGI Securities, the analyst earned a reputation for being the most accurate in the world when it came to Apple predictions. This was likely due to his role seeing him spend a huge amount of time on the ground, talking to Apple suppliers.
Since leaving the firm, his role may now see him with decreased access to iPhone parts suppliers. A fair number of his posts of late have been speculative – Kuo expressing opinions about what seems likely to him, rather than extrapolating from supply-chain based facts. This has included some apparently uninformed comments, like those on the role of the titanium shell in iPhone 15 overheating issues – which in fact turned out to be a software issue.
For that reason, our coverage draws a distinction between his speculative posts, and those based on supplier info.
This particular report is a little trickier. It is based on hard data regarding yield rates, while the idea of including the lens in the iPhone 16 Pro model is more speculative. All the same, there’s likely to be some supplier sourcing behind this one, and it would be consistent with Apple’s approach, so we’re going to give it at least some weight. We’ll need to corroborate with other sources nearer the time before accepting it, however.
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