Analyst Ming-Chi Kuo reports that Apple is proactively maneuvering in order to diversify its camera lens suppliers for the next iPhone in light of the COVID-19 coronavirus outbreak.
Writing in a new research note that was posted to WeChat, seen by MacRumors, the revered analyst express belief that Apple is adding new suppliers to stay on top of the situation.
iPhone camera lens shipments from Genius Electronic Optical reportedly fell significantly over the past month and supplies are dwindling. Kuo predicts there is about a month of lens inventory remaining, with significant production resuming in May at the earliest.
Yujingguang, which is the key supplier of the iPhone’s front lens and the 3D-sensing receiver lens, will also be affected by the virus spread. According to Kuo, Yujingguang’s revenue will be “significantly lower than the market consensus” over the coronaries woes.
AppleInsider has more:
In Kuo’s view, Yujingguang will lose its status as an exclusive provider of ultra-wide-angle camera lenses for Apple’s premium iPhone models for the iPhone 12 collection, securing between 30 percent and 40 precent of its orders in the period.
Kuo doesn’t say why the exclusivity for that iPhone 11 part will end except that Daliguang will obtain some of the orders specifically for the next iPhone. It’s suggested it could be to help “improve the capacity utilization rate” of the components production as many Chinese plants are enduring lower-than-usual production levels for the moment.
Daliguang is another supplier of lenses in the iPhone’s supply chain.
Apple recently warned investors to prepare for a revenue miss in the March quarter.
Apple is known for diversifying its suppliers all the time. Doing so enables the Cupertino company to not only mitigate risk by purchasing a key component from a single supplier but also provide contingencies for situations like this.
Apple CEO Tim Cook has called the coronavirus only a “temporary condition” for his company.
“And so the question for us after we get on the other side will be, was the resilience there or not and do we need to make some changes,” he said at the recent shareholder meeting. “My perspective sitting here today is that if there are changes, you’re talking about adjusting some knobs, not some sort of wholesale fundamental change.”
Kuo’s analysis arrived hot on the heels of news that LG Innotek was forced to temporarily shut down a factory in Gumi, South Korea where it builds camera modules for iPhones because an employee was confirmed to have contracted coronavirus.
The facility is closed for today while decontamination takes place. It may re-open tomorrow, but it’s currently unclear if (and when for that matter) it might reach its full capacity.