Samsung’s upcoming flagship Galaxy S24 series, reportedly set to be unveiled in mid-January 2024, will feature Qualcomm’s latest Snapdragon 8 Gen 3 processor. This new series will highlight Samsung’s first-ever generative AI smartphone, with a sales target expected to increase by over 10% compared to the previous S23 model, reaching more than 34 million units.

As reported by “The Korea Daily,” Samsung is planning to unveil the Galaxy S24 series of new smartphones in mid-January 2024, making it the first major Android flagship to be launched next year. To ensure the successful market debut of the new devices, Samsung is expected to initiate the procurement process from its supply chain in the very near future.

Industry sources have revealed that Samsung’s internal estimates project smartphone sales for next year to reach approximately 253 million units and this figure is expected to be adjusted upwards in the near future according to Economic Daily.

In comparison, Apple’s projected total iPhone sales for the next year, according to a market analyst, are expected to be around 250 million units, making the estimates of these two major smartphone giants quite close.

It is reported that Samsung’s recent flagship devices in the S series have delivered subpar performance. Both the S21 and S22 models achieved sales figures of fewer than 30 million units, while the estimated sales for the S23 series stand at around 31 million units.

Notably, Samsung is currently collaborating with major players such as Google and Microsoft, and there is a strong likelihood that they will incorporate generative AI features like Google Bard or ChatGPT into the Galaxy S24.

This move aims to make the Galaxy S24 their first generative AI smartphone, serving as a prominent selling point for the new device and enhancing the operating system, thereby narrowing the gap with Apple.

Industry experts point out that while smartphone brands tend to estimate sales figures for new products before their launch, the smartphone market has experienced weakened demand in recent years.

Many brands have adopted a conservative approach to sales estimates, even controlling production capacity and marketing budgets to reduce risks. In this context, Samsung’s decision to set clear growth targets stands as a demonstration of their high confidence in the new product.

As for the supply chain, Largan Precision is the primary supplier of main camera components for the Galaxy S24, while GIS is responsible for supplying the in-display fingerprint module, and TXC Corporation provides quartz components.

(Photo credit: Samsung)

Major optical manufacturer, Largan Precision, held its online Q3 earnings conference on October 12, 2023. During the session, Chairman Lin En-ping’s responses to inquiries from analysts conveyed that the previously sluggish smartphone market might finally witness an upturn in Q4, as the iPhone 15 Pro Max’s robust pre-order performance surpassed market expectations. This bodes well for downstream customers’ willingness to procure lenses, and high-end lens demand is expected to rise.

TrendForce’s Insight:

1. Positive Signals Emerge from Largan Precision’s Statement

Since the beginning of 2023, the global smartphone market has been experiencing a general slump, influenced by factors such as China’s post-pandemic economic recovery falling short of expectations, rampant inflation, and uncertainty about economic prospects. Looking back at the previous Q1 and Q2 earnings conferences held by Largan Precision, Chairman Lin En-ping consistently displayed a relatively pessimistic outlook when addressing questions from financial analysts. This pessimism can be attributed to the subdued end-user demand, resulting in a natural decline in procurement momentum among downstream customers, which has made it challenging for Largan Precision to foresee clear future order demand.

However, with the arrival of Q4, the traditional peak season for smartphones, Chairman Lin En-ping provided a more positive response during the latest conference. This shift in stance can be attributed to the better-than-expected pre-order status of the high-end iPhone 15 Pro Max and the subsequent improvement in procurement momentum among downstream customers. Furthermore, there has been a resurgence in overall demand for high-end lenses. It is anticipated that the end demand for smartphones may improve in the upcoming Q4.

2. Increased Willingness for Lens Upgrades

Source to Tai Sounds, in what is considered a major camera upgrade highlight for the iPhone 15 Pro Max, the “periscope lens,” Apple made no mention of it during its product announcement. Industry insiders suggest that the 5x optical zoom is achieved using a periscope lens, and Apple may have chosen not to disclose this technology, possibly due to competition within the industry. Renowned analyst, Ming-Chi Kuo, who is known for his deep understanding of Apple, stated that Largan Precision has expanded its production capacity to meet this order.

Kuo explained that Apple’s long-range camera for the iPhone will adopt a periscope design starting this year. This design will be used in the iPhone 15 Pro Max released this year and the iPhone 16 Pro Max and iPhone 16 Pro scheduled for next year. Largan Precision, a Taiwanese manufacturer, has expanded its production facilities in both Taichung and Xiamen to accommodate this order.

During the Apple product presentation, they emphasized the 5x optical zoom capability of the iPhone 15 Pro Max, claiming it’s equivalent to having seven individual camera lenses. However, there was no mention of the key technology, the “periscope lens,” which led some market experts to believe that the iPhone 15 Pro Max did not incorporate this technology, causing a decline in optical lens-related stocks.

According to the analyst, Ming-Chi Kuo’s,  from Tianfeng Securities’ latest research on September 13th, Apple’s long-range camera for the iPhone will indeed adopt a periscope design starting this year, covering the iPhone 15 Pro Max, next year’s iPhone 16 Pro Max, and iPhone 16 Pro.

In terms of technical specifications, Kuo’s analysis indicates that the periscope lenses on the iPhone 15 and iPhone 16 will share similar specifications, including a 1/3″ 12MP sensor, f/2.8 aperture, Sensor shift support, and 5-6x optical zoom.

Kuo also pointed out that the cost of components depends on yield rates in mass production. Based on estimates using the cost of existing periscope lenses as a reference, the total production value of various components for the rear cameras of the iPhone 15 series in the second half of this year, including CIS, VCM, lenses, and CCM, is expected to grow by 5-10%, 20-25%, 65-70%, and 20-25%, respectively.

Benefiting from more iPhone 16 Pro models adopting periscope lenses and other rear camera upgrades, the total production value of various components for the rear cameras of the new iPhone 16 series next year, including CIS, VCM, lenses, and CCM, is expected to grow by 15-20%, 15-20%, 40-45%, and 15-20%, respectively.

Kuo also explained that among all the components, the lens specifications and business models are changing the most, and the growth in production value is most significant. A complete periscope lens module includes high-priced 1G2P lenses, two high-priced prisms, and lens barrels. High-priced materials are the key drivers of production value. Apple’s lens suppliers will provide more complex assembly services for the first time, as Largan Precision and Yujingguang have expanded their production capacities in Taichung and Xiamen, respectively, to meet this order. (Image credit: Apple.com)

(Source: https://www.taisounds.com/news/content/76/80703)