Ming-Chi Kuo suggests that Apple might include the 5X tetraprism camera in next year’s iPhone 16 Pro which is one of the exclusive features of this year’s iPhone 15 Pro Max. It comes from the yield rate improvements of Apple’s periscope camera supplier, Largan’s tetraprism lens assembly. Reportedly, the yield for the said equipment has increased from 40% in 3Q23 to 70% in 4Q23.

Huawei might be the next big player to adopt Largan’s periscope equipment

iPhone 15 Pro Max tetraprism

Largan’s exclusive position as the supplier for the tetraprism camera lens for the iPhone 15 Pro Max initially faced challenges, with a production yield of only 40% in the third quarter of 2023. This led to negative gross margins and a dip in EPS. However, Kuo’s recent surveys indicate a substantial improvement in yield to 70% or more, turning the tetraprism lens assembly profitable and a major contributor to fourth-quarter EPS.

The expected 2023 EPS of ~150 significantly surpasses the conservative market consensus of 130–140. Looking ahead to 2024, the camera equipment manufacturer is expected to gain more shares for periscope camera lenses, especially from two key players — Apple and Huawei.

Apple’s inclusion of a tetraprism camera in the iPhone 16 Pro is expected to drive a staggering 160% YoY growth in iPhone shipments featuring this advanced camera technology. Huawei, with its upcoming Huawei P70 series featuring periscope cameras and powered by its own Kirin chips, is also anticipated to witness a 100% YoY shipment growth in 2024.

Largan, holding primary supplier status for both Apple and Huawei, is expected to gain supply shares of 85–90% and 50–60%, respectively.

The improvements in yield for Apple’s tetraprism lens assembly from 3Q23 in 4Q23 hints a significant 130% increase in total periscope orders for the manufacturer in 2024.

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