KGI Securities analyst Ming-Chi Kuo (via MacRumors.com), who is well known for his insight into Apple's (NASDAQ: AAPL) supply chain and future products, recently predicted that next year's iPhones won't include 3D sensing capabilities integrated into their rear-facing cameras. Those 3D sensing capabilities enable Apple's Face ID authentication feature and Animoji customized 3D animated emojis.
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Apple integrates such functionality into the front-facing camera system of the iPhone X, which the company markets as a "TrueDepth camera." But Kuo doesn't expect them in the rear-facing cameras next year.
To be clear: Kuo's statement appears to be a prediction based on his own assumptions. Nevertheless, Kuo's track record is solid enough that when he makes a prediction, it's usually a good idea to pay attention.
Let's go over why Kuo believes what he does.
Two big issues
Kuo concedes that 3D sensing capability integrated into rear-facing iPhone cameras could "potentially provide more augmented reality (AR) applications," but observes that Apple needs to overcome two hurdles to make that a reality.
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First, Kuo thinks that Apple needs to cultivate a software ecosystem around its ARKit framework, which Apple describes as a software framework "that allows [developers] to easily create unparalleled augmented reality experiences for iPhone and iPad."
Such software ecosystem building, the analyst says, "takes time."
Secondly, Kuo thinks that for Apple to pull this off, it'll need to achieve "stable shipments and on-time shipping, which are challenging due to the higher spec requirements of rear TrueDepth camera."
This point seems to be a lot more convincing than the first.
It's clear that Apple and its suppliers have had trouble mass producing the TrueDepth camera system found in the iPhone X. If Kuo is right about a rear-facing TrueDepth camera being more difficult to build than the front-facing one on the iPhone X, then it could be too risky to introduce the feature in next year's iPhones.
That said, Apple and its suppliers will certainly gain a lot of experience in mass producing the TrueDepth camera over the next year, so the relative difficulty of introducing a rear-facing TrueDepth camera system next year could be lower than introducing a front-facing one this year was.
Foolish final thoughts
In a recent interview with Mashable, Apple hardware chief Dan Riccio said that the design of the iPhone X was locked down in November 2016. That, Riccio said in the interview, was "early."
What this suggests, then, is that the final design and specifications of next year's iPhones probably aren't locked down yet and likely won't be locked down for at least another month -- perhaps even longer.
I think that once the designs for next year's iPhones are locked down, it won't be too long before that information leaks out to the public.
If I had to bet on whether the 2018 iPhones will include rear-facing TrueDepth cameras, I'd guess that the direct successor to this year's iPhone X won't include that feature, but the rumored larger iPhone X with a 6.46-inch display will.
Apple has differentiated its smaller and larger iPhones by camera features in the past, and doing so again next year wouldn't be the least bit surprising. If anything, it'd be a great way for Apple to up-sell customers on a more expensive, larger-screen iPhone X.
Since the smartphone market is starting to see industrywide unit shipment growth slow to a crawl, it makes sense for companies like Apple to try to increase revenue per device via features in the absence of significant device shipment growth.
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Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.