At the end of the June 2018 quarter the company began shipping higher volumes to key customers, exceeding management expectations. Additionally, the company expects significant acceleration of order volume in the September 2018 and December 2018 quarters.
Loup Ventures believes that a high percentage of these orders were secured by Apple.
Given the sooner than expected ramp in VCSEL arrays, we believe this fall, Apple will have 3 (including iPhone X) iPhone models with the VCSEL laser. This should be a slight positive for ASP’s in Sep-18 and an increasingly positive in Dec-18 as production of these new phones ramps. Furthermore, Lumentum results suggest current iPhone X demand is healthy. Most importantly, Lumentum results and guidance are evidence that Apple continues to be committed to augmented reality. We anticipate 3D sensing will only be front-facing on the new iPhones and believe Apple will be incorporating this technology in new product categories such as the iPad. Given Lumentum and other VCSEL suppliers continue to be capacity constrained, we believe Apple has once again secured the majority of all VCSELs produced in 2018, further expanding their lead in AR.
If Apple does offer Face ID on all three of its rumored new iPhones, this could increase the Street's iPhone ASP in September ($731) and December ($790).
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