KGI Securities analyst Ming-Chi Kuo has said repeatedly that Apple would release three iPhones in 2018. All of them will have an iPhone X-like design with a top notch. Kuo has told investors that all the three iPhones coming this year would feature the Face ID technology. Now a new report coming out of Korea has confirmed Kuo’s predictions. Supply chain sources told Korean publication ETNews that Apple was going to add its proprietary facial recognition technology to all three upcoming iPhones.
One of the reasons the iPhone X launch was delayed last year – and faced supply shortages upon launch – was that the 3D sensing modules that enable Face ID were difficult to manufacture. Apple has since resolved the manufacturing issues, but a bigger challenge lies ahead. Since Apple will be adding Face ID to all three iPhones coming this year, it will need larger quantities of 3D sensing modules. Apple makes more than 200 million iPhones every year.
Sources told ETNews that Apple has added two Chinese companies as 3D sensing module suppliers to diversify its supplier base. It’s quite rare for the Apple to have Chinese suppliers for critical components. LG Innotek, which supplies Face ID modules for the iPhone X, will remain the primary supplier. It means the two Chinese vendors will be responsible for only a small portion of the total requirements.
LG Innotek told its investors last month that it would invest $821 million to build additional production lines for the camera and next-generation modules, most likely for Apple. LG Innotek would also supply 3D sensors for the iPad Pro 3, which would borrow Face ID from the premium iPhone. According to The Investor, the $821 million that LG is investing in new production lines is coming from Apple. The deal was finalized after a series of meetings between Apple CEO Tim Cook and LG Innotek chief Park Jong-seok in November last year.
The TrueDepth camera system, ear speaker, front camera, and other sensors were the reason Apple had to add the weird notch on the iPhone X. Recent reports suggest that the Cupertino company is working to reduce the size of the notch by combining the front camera with the TrueDepth camera setup that enables Face ID and Animoji. However, the technology may not debut until 2019 at the earliest.
According to Ming-Chi Kuo, Apple will release a successor to the iPhone X with 5.8-inch OLED display, a larger 6.5-inch iPhone X Plus, and a third iPhone with a 6.1-inch LCD screen. All three of them will have a bezel-less design. Both the OLED versions will cost more than $1,000 while the LCD variant will be priced in the same range as the iPhone 8 ($700-$800). The LCD iPhone is said to be manufactured by Pegatron, Wistron, and Foxconn.
According to Kuo, the LCD version will have the same old rectangular battery design and 3GB RAM. The other two models will pack a higher 4GB RAM and a two-cell, L-shaped battery similar to the iPhone X. Apple will keep the dual-camera setup exclusive to the OLED models. The LCD iPhone would have a single camera on the back. Surprisingly, Apple will also remove the 3D Touch functionality from the LCD version, claims Kuo.
The analyst believes that the LCD version will be the most popular of the three iPhones coming this year. It could account for more than 50% of new iPhone shipments in the second half of this year. The fact that it would have an iPhone X-like bezel-less design with Face ID, Animoji and other features at a price tag of $700 to $800 would make it a lucrative buy. Of course, it will have a few compromises such as the lack of 3D Touch.
In a separate research note, Kuo told investors that all the three iPhones coming in 2018 would use Intel’s baseband modems. Apple has ditched Qualcomm due to the legal disputes between them. The analyst said Intel was also offering more competitive prices, and its modems were capable of meeting Apple’s challenging technical requirements. Intel’s XMM 7560 modems support 4×4 MIMO technology, which means they would offer faster LTE transmission speeds.
The XMM 7560 supports both GSM and CDMA networks, meaning a single iPhone model could work across all major US carriers. Intel’s older chips lacked CDMA support. The XMM 7560 also supports dual standby and dual-SIM functionality, but it is too early to say whether the upcoming iPhones would have dual-SIM support.
The iPhone X’s high price tag helped Apple post record revenues during the holiday quarter, though the total iPhone shipments declined compared to the same period a year ago. Analysts have blamed the iPhone X’s $1000 price for lower than expected sales. Sensing a weak demand, Apple has reportedly reduced the iPhone X production from 40 million to 20 million units in the current quarter.
