Ming-Chi Kuo reports on Apple's Mixed Reality Headset Lens Suppliers Genius Electronic Optical and Young Optics
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A company by the name of 'Genius Electronic Optical' that happens to be one of Apple's key pancake/Fresnel lens suppliers for their 2022-2023 AR/VR for mixed reality headsets, has received a huge order from Meta (Facebook) for their next-gen headset which could delay Apple's headset to late 2022 or Q1 2023, according to Ming Chi Kuo (Guo Mingchi as noted below), a top Apple analyst representing TF International Securities.
Below are bullet points from Kuo's research paper:
- Apple's AR/MR production delays will help Genius close the gap in production yields for pancake lenses with Young Optics, which has obtained the NPI. Genius's production yield is currently catching up with Young Optics' level, which is favorable for increasing the proportion of orders and revenue growth.
- Genius is the world's largest pancake/Fresnel lens supplier for AR/VR. Genius is the only company that has received orders for pancake/Fresnel lenses from top brands such as Apple, Meta, and Sony.
- We expect Meta to release its new high-end VR headset, Oculus Quest 3, in mid- 2H22, with an estimated shipment of 1–2 million units in 2022.
- The Quest 3 is the first Meta VR device to use Mini LED panels. Mini LEDs provide a more immersive experience, and the Quest 3 comes with two 2.48" Mini LED panels at a unit price of US$25–30. The Mini LED panel resolution is 2160x2160, and Sharp and JDI are panel makers.
- Quest 3 is the first Meta VR device to use the 2P pancake lens (1P Fresnel lens for all previous devices). Quest 3 adopts two 2P pancake lenses with a unit price of US$10–15. The suppliers are Genius and Sunny Optical ; they have about 50% of orders.
- Apple's AR/MR production delays will help Genius close the gap in production yields for pancake lenses with Young Optics.
- We reiterate our previous report's prediction that Apple's AR/MR headset will be postponed to the end of 2022. We believe that the more significant shipments will take place in 1Q23.
- Young Optics has been awarded the New Product Introduction (NPI) for Apple's AR/MR pancake lens. The assembly schedule delay provides more time for Genius to improve its yield that could translated to half of Apple's HMD lens orders.
- Apple's AR/MR uses two 3P pancake lenses at a unit price of US $15–20 each. If the contribution from the camera lens is included, each Apple AR/MR contributes about $45–$55 to Genius's revenue, which is equivalent to 25–35 high-end 7P lenses.
- While Largan is still looking for new growth momentum, Genius has already become a global pancake/Fresnel lens leader for the Metaverse.
- High-price pancake/Fresnel lenses directly impact user experience and headset form factor design and are, therefore, the most critical optical component for AR/VR.
- We expect Meta's VR to grow by 30% YoY to 12 million units in 2022.
- We predict that Sony's PS5 VR will start shipments from 2Q22 and that Genius and Goertek will be the suppliers of high unit price Fresnel lenses (each of them will get half of the order share). This order will help Genius beat the seasonality.
- Apple's AR/MR will contribute significantly to Genius's revenue momentum from 1Q23 onwards.
- AR/VR device shipments and pancake lens specifications still have a lot of room for growth and upgrades in the future, which will help Genius's long-term growth. We believe that Genius's pancake/Fresnel lens design and production advantages will be maintained for several years and drive the company's rapid growth.