KGI Analyst Predicts Apple (AAPL) Will Add Another Film Sensor to CGS in 2019 iPhone Models

April 23, 2018 10:11 AM EDT
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KGI analyst Ming-Chi Kuo predicts Apple's (NASDAQ: AAPL) 2019 iPhone models will add a film sensor to the cover glass sensor (CGS), which will increase lamination process complexity and boost CGS ASPs by 15-25%. This is seen offsetting the possible removal of the 3D Touch module in 2019 OLED models.

"In addition to the existing x-y touch film sensor, we predict the new 2H19 iPhone models will add another film sensor to CGS in order to create a new user experience," Kuo commented. "Should this prediction hold true, the implied additional material costs and manufacturing value added (MVA) would see the unit price of CGS increase by 15-25% (compared to the 2H18 6.1” LCD iPhone counterpart) to US$23-26, potentially boosting the growth of CGS module suppliers GIS and TPK and film makers Nissha and O-Film in 2H19."

Kuo said the 3D Touch module may be removed from 2H18 6.1” LCD iPhone, but pressure sensing function, simulated by software, is likely to be retained.

"In our view, pressure sensing (3D Touch) has not been critical to user experience," he said. "Therefore, despite the performance of software simulation lagging that of 3D Touch module, it should still be sufficient to deliver on user experience."

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