We think Sony may not be able to deliver its full share of dual cameras to Apple due to: (1) lower-than-expected yield, and (2) damage to its production facility from the April earthquake in Kumamoto. As a result, we think LGI will gain majority share of the initial dual camera orders from Apple; hence, we upgrade to Buy.
Notably, Nomura is also predicting that Apple will bring OIS to the 4.7-inch iPhone.
We expect a sharp increase in camera module ASP from 2H16F as we think: 1) dual camera module is likely to command 2.5x ASP premium vs. single-cam, and 2) OIS (optical image stabilisation) will also be equipped in the new 4.7” iPhones – currently only the 5.5” model has OIS.
Leaked renders of the iPhone 7 and iPhone 7 Plus have shown changes to the opening for the camera that corroborate reports of a dual lens camera for the 5.5-inch iPhone and perhaps a better quality single lens camera for the 4.7-inch model. Check out a 360 degree video here.
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