iPhone 8 will be fitted with a ‘revolutionary’ 3D-sensing front camera, with multiple reports since that this will be used for augmented reality applications. More than one company has been tipped to be making components for the 3D system, with Himax Technologies the latest of these.

There are already 3D sensing technologies based on PC/tablet that can run: (1) face recognition, (2) gesture sensing, (3) 3D modeling, and (4) photo shooting enhancement. Among those functions. Among the others, we think 3D modeling has the greatest potential, because it can be developed to new AR/VR applications (gaming, virtual social networks, etc.). Today, Intel’s RealSense 3D camera has enabled 3D sensing in PC/tablet platforms. Himax’s wafer level optics (WLO) technology can further reduce the size and fit the 3D sensing in smartphones.

“Our 2018 EPS is now 54% higher than consensus, as we are more optimistic about the 3D sensing opportunity in non-Apple smartphones. We estimate that 3D sensing will contribute 20% of Himax’s 2018 revenue, with better margins, and this would fill the vacuum of the company’s AR smart glasses business (Google Glass or Microsoft HoloLens) before it takes off again in 2019. That means the stock’s P/E multiple is likely to expand to 25-35x (i.e., the high end of its historical range), given the strong product cycle.”

The iPhone 8 will come with an OLED panel which could stretch across the entire front of the device, meaning the iPhone might be priced at more than $1,000.

Source: ibtimes