J.P. Morgan: What Apple sees in 3D scanning

In the iPhone 8 it will recognize faces, says analyst Rod Hall, not augment reality.

Anticipating what he believes will be one of the signature features of the 10-anniversary iPhone, J.P. Morgan analyst Rod Hall has taken a deep dive into 3D scanning.

Excerpted from a note to clients that landed in my inbox overnight:

  • Facial recognition, not AR. Our discussions with industry contacts suggest that Apple is only planning a single, front facing, 3D sensor in the 2017 iPhone flagship. We believe this is initially aimed at replacing the fingerprint sensor, which has been left without a home given the edge-to-edge OLED screen on the device.
  • $10-15 of additional BOM. We estimate that the entire 3D module will cost in the ballpark of $10-15 with a higher probability for a price closer to the high end of that range. Our work also suggests that Apple is keeping separate front facing camera and TOF [time of flight] modules on the 2017 flagship.
  • Nice feature for Apple. We realize that AR has more “fake news” appeal than facial recognition. However, we believe that facial scanning biometrics would alleviate irritating fingerprint sensor failure in the wet conditions iPhones are now designed to survive. We also suspect that facial recognition is more secure than 1 in 50,000 fingerprint scanning and could help with Apple Pay adoption…
  • Future of 3D scanning. We see a lot of future application including AR for 3D scanning, though not on Apple’s platform this year. Opening up an iOS API for the functionality would likely result in many innovative uses, including clothing sizing, home improvement measurements, scanning for 3D printing, etc. We also believe inexpensive 3D scanners would have application in automotive, appliances, etc.

Reiterate Overweight and $142 price target. 

2 Comments

  1. Gianfranco Pedron said:

    Accurately situating the viewer’s retinas with respect to the emitter sounds like a possible first step towards freeform 3D projection of content directly to them.

    1
    February 15, 2017
  2. John Kirk said:

    I don’t know whether any of this is actually going to happen, but things like fingerprint identification, retina recognition, etc, fall right in Apple’s wheelhouse. Their ability to integrated hardware, software and ecosystem gives the an advantage that is both unique and sustainable.

    0
    February 15, 2017

Leave a Reply