How iPhone X TrueDepth Camera Could Boost Apple Inc. Stock

Advertisement

At the moment, the TrueDepth camera Apple Inc. (NASDAQ:AAPL) introduced as a key feature of its new iPhone X has been the source of some angst among Apple fans. The camera is being blamed for production delays that are expected to constrain iPhone X availability at launch. And the cutout needed to accommodate the advanced camera is being criticized for ruining the all-display look of the new iPhone.

How iPhone X TrueDepth Camera Could Boost Apple Inc. Stock

Source: Apple

But according to a respected Apple analyst, that TrueDepth camera is the real deal, and it is so advanced that it gives Apple as much as a 2.5-year lead over its Android competitors.

If consumers end up being smitten by the new camera’s capabilities, that technical lead could pay off with a big increase in iPhone sales (once the manufacturing issues are ironed out), and a corresponding boost to APPL stock.

The Technical Lead of Apple’s True Depth Camera

The TrueDepth camera, which debuts on the iPhone X, is actually a highly sophisticated system with multiple components, including a traditional camera, an infrared camera, a projector, ambient light sensor, proximity sensor and more. The combination of cameras, sensors and Apple’s powerful new A11 Bionic chip combine to offer futuristic features like Face ID biometric security, selfies with depth of field and augmented reality support.

There’s nothing that compares to these capabilities among the Android smartphone makers.

MacRumors reported on a note to AAPL investors from KGI Security analyst Ming-Chi Kuo about the TrueDepth camera. He had previously believed that the advanced technology might take Android competitors a year or perhaps two to replicate.

After seeing more of Apple’s TrueDepth camera demonstrations, Kuo now feels that Apple’s system is even more advanced than previously thought. He predicts that it will take as long as 2.5 years before we’ll see similar technology show up in smartphones running Alphabet Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL) Android operating system.

Short-Term Pain for AAPL Stock?

The iPhone X and its TrueDepth camera has caused some short-term pain for AAPL stock.

The display cutout needed to accommodate the cameras and sensors has caused mixed reactions. The Animoji feature Apple showcased at its iPhone event was written off as a gimmick, and there have been concerns that FaceID might not be secure — after all, Samsung Electronics Galaxy S8 iris scanning facial recognition was hacked almost immediately. There was also the infamous Face ID fail during the iPhone X demo at the Apple event. Although it turns out the security system was actually functioning exactly the way it was supposed to.

The TrueDepth camera has also reportedly caused manufacturing delays that are impacting iPhone X availability at launch and for the rest of 2017. Predictions are that iPhone sales for the new flagship could be limited to 30-35 million units this year because of the camera, wreaking havoc with the iPhone upgrade super cycle that had been expected to propel AAPL stock to new highs.

Long-Term Lead

However, many Apple watchers — including Ming-Chi Kuo — are convinced that the company is on to something with the trueDepth camera.

Apple insists that Face ID is far more secure than Touch ID. Once the iPhone X is released, its futuristic security could turn into a key selling point instead of a something that needs to be defended. With the growing popularity of augmented reality, the TrueDepth camera could be the key to seizing a leadership position among smartphone makers.

If consumers go all in on AR, facial recognition, advanced selfie photos and other iPhone X features that are powered by the TrueDepth camera — and Apple does indeed have the 2.5 year technology lead that Kuo suggests — imagine what that could do for iPhone sales once Apple solves the current manufacturing challenges.

We might see a massive upgrade cycle among current iPhone owners and a wave of defections from the Android platform for several years. With iPhone sales being the primary driver of Apple revenue, now imagine what the corresponding increase in iPhone sales would do for AAPL stock.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Brad Moon has been writing for InvestorPlace.com since 2012. He also writes about stocks for Kiplinger and has been a senior contributor focusing on consumer technology for Forbes since 2015.


Article printed from InvestorPlace Media, https://investorplace.com/2017/10/iphone-x-truedepth-camera-boost-apple-inc-aapl-stock/.

©2024 InvestorPlace Media, LLC