The big event of last week was naturally the Mobile World Congress in Barcelona, Spain. This is a good time to reflect on the strategy of the big three smartphone brands in a time of market uncertainty. Apple, Huawei and Samsung are under scrutiny from the industrial and financial ecosystem as well as consumers.
Let’s talk first about the technology leader. Apple was ahead of everyone in September, showing off its latest generation iPhone XR, XS and XS Max. If we look at the offering here in Barcelona, the competition is indeed upping its game.
Huawei claimed market second place in the last quarter of 2018. It has chosen a triple camera setup with dual Optical Image Stabilization (OIS) on the rear and a single-hole selfie camera on the front on its Nova 4. While this still is four cameras in total, with respect to its earlier P20 Pro model, 3D sensing is missing. Therefore 3D sensing is still considered a higher-end option than under-display fingerprint sensing.
Samsung showed off a new generation of handsets surprisingly similar to Huawei’s. The number one smartphone maker nevertheless showed its strength with a full line-up ranging from three cameras, two rear plus one front, up to six, four rear and two front, in the S10+ 5G.
This profusion of cameras is highlighted in the latest Yole Développement report: “Status of the Camera Module Industry 2019 – Focus on Wafer Level Optics”. It will boost the camera module market’s value from $27.1B in 2018 to $45.7B by 2024.
Compact Camera Module (CCM) revenue is driven by a profusion of cameras in mobile devices.
The S10+ 5G from Samsung was probably the biggest announcement of the show. The 5G connection is one thing. But then, the 3D Time-of-Flight (TOF) camera on both sides is definitively a bold move from Samsung, which bet big by postponing the introduction of 3D sensing and biometry until two years after Apple.
There are obviously two main trends conflicting right now: one favors sensing on the front display side of smartphones; the other favors display.
The display strategy is driven by a ‘wow effect’, by increasing screen-to-body ratio, showing immersive videos that are one of the drivers of 5G adoption. The foldable trend is also an extension of this, and may end up in a compromise between a smartphone and a tablet. It is not clear right now if this could convert into additional revenues or volume for the industry, knowing what we know about smartphones and tablets.
The sensing strategy is using 3D as a biometric interface, where biometry and Human Machine Interface (HMI) are combined. This one conflicts with the full display aesthetic and is constrained by handset design and camera and display technologies. Apple is actively working on the ideal technical solution, which should reach the market before the year’s end.
In the latest Yole report on Consumer Biometrics: Market and Technology Trends 2018, we showed that under-display fingerprint and 3D face recognition should remain as the main identification mechanisms in the near future. This will grow the consumer biometry market from $3.7B in 2017 up to $15.7B in 2023.
Under-display fingerprint and 3D face recognition are the main drivers for consumer biometrics.
What we’ve seen so far is that a display strategy allowed Samsung and China-based companies to sustain innovation and sales of mid-range phones through appealing aesthetics. This is unfortunately a dead end, since the selfie camera cannot be removed and would need improvement to drive sales and renewals.
Therefore we think this is most probably a temporary strategy. It will allow its proponents to develop more affordable 3D sensing solutions matching Apple’s FaceID performance and taking into account the additional constraint of a seamless integration avoiding any notch or hole in the display.
Huawei’s strategy has been quite simple. The P20 Pro with 3D sensing was an answer to Apple, matching its 3D sensing capabilities. The company’s latest release, the Nova 4, is an answer to Samsung’s full display lineup. Obviously, Huawei is fighting on both fronts against Apple and Samsung.
On Samsung’s side, things look no different. Samsung can rely on its lucrative display supply business in order to push the bigger screen-to-body ratio trend. This helped to serve its mid-range market, but the company is not forgetting its top market either. With the introduction of 3D sensing ToF in the S10+ 5G Samsung will serve this very high-end of the market, truly playing a part in the “luxury phone” category.
Pierre Cambou has been part of the imaging industry since 1999. He first took several positions at Thomson TCS, which became Atmel Grenoble in 2001 and e2v Semiconductors in 2006. In 2012 Pierre founded Vence Innovation, later renamed Irlynx, to bring to market an infrared sensor technology for smart environments and interactions. He has an Engineering degree from Université de Technologie de Compiègne and a Master of Science from Virginia Tech. Pierre also graduated with an MBA from Grenoble Ecole de Management. In 2014 he joined Yole Développement as Imaging Activity Leader.
Guillaume Girardin is Director of the Photonics, Sensing & Display Division at Yole Développement, part of Yole Group of Companies. As director he also performs several technical activities covering sensing technologies, including solid-state lighting & display, MEMS, sensors, actuators, imaging, photonics and optoelectronics fields.
Based on his valuable experience in the semiconductor industry, Guillaume manages the expansion of the technical and market expertise of his team, by increasing synergies around imaging, lighting and display, and enlarging the optoelectronics scope. The team interacts daily with leading companies allowing the analysts to collect a large amount of data and integrate their understanding of the evolution of the market with technology breakthroughs. In parallel, Guillaume’s mission is focused on the management of business relationships with leaders of the industry and the development of market research and strategy consulting activities within the Yole Group.
Dr Girardin holds a Ph.D. In Physics and Nanotechnology from the Claude Bernard University Lyon 1 (Lyon, France) and an M.Sc. in Technology and Innovation Management from EM Lyon School of Business (Lyon, France).
Status of the Camera Module Industry 2019 – Focus on Wafer Level Optics
CMOS Camera Modules (CCM) have become a key sensor technology – what are the dynamics and strategies in this highly competitive market?
Consumer Biometrics: Market and Technologies Trends 2018
Over the last five years, the promising and highly dynamic consumer biometric sensor market has been totally reshaped
3D Imaging and Sensing 2018
The iPhone X initiated a trend.
What happens next?
Related Reports and Monitors
InP Wafer, Epiwafer and Device Market 2021: Photonics and RF Applications
Market & Technology