Reportedly, Apple AAPL is collaborating with Sony Corporation SNE to deploy 3D cameras on iPhone XI in a bid to revive dwindling iPhone sales globally. The company plans to leverage Sony’s long-range 3D Camera based on Time of Flight (ToF) technology.
This move is expected to enhance iPhone’s photography, security and gaming features, which will help in luring more customers. Further, it will enable users to precisely map objects in 3D and focus on every part of the picture up to five meters. Moreover, it can also be used to track objects in the dark.
Sony’s 3D camera boasts reliability and consistency. The new camera will be accompanied with a few sensors, which will shrink the notch. Moreover, this collaboration is expected to give Apple a competitive edge and boost user confidence as a 3D map of the users’ face makes hacking extremely difficult.
Notably, the new camera will also be used for Augmented reality (AR) and Virtual Reality (VR) experiences to boost user engagement level. Players can make gestures to manipulate the gaming environment, fight or cast a spell.
Apple Inc. Price and Consensus
Apple Inc. Price and Consensus | Apple Inc. Quote
Can New Features Bolster iPhone Sales?
Lower demand for its new iPhones has, reportedly, compelled the company to cut production targets. Total iPhone unit sales of 46.89 million in the last reported quarter were flat year over year.
Notably, the company’s soft sales forecast of $89-$93 billion for first-quarter fiscal 2019 reflects weak iPhone unit shipment in the holiday season. Moreover, sluggish demand has forced many of its suppliers like Lumentum LITE and Cirrus Logic CRUS to lower their outlook.
It was also expected that Trump would impose a 10% import duty on iPhones and laptops imported from China, adding to Apple’s woes. However, a 90-day temporary truce has been called by both the countries. Notably, iPhone has been blamed for increasing the trade imbalance between the United States and China.
However, we believe that adding new features may just not be enough to drive sales.
Reducing Dependence on iPhones
Apple’s excessive dependence on iPhone is a risk to overall growth and the company needs to look for newer avenues to boost revenues.
The company has started penetrating the healthcare market and is gaining traction with Apple Watch by making clinically relevant health information available to users. Apple Watch 4 promises ECG capabilities, enabling users to obtain a 30-second ECG reading for more insight into their health.
Apple has been on a spending spree to scoop up original TV and film content for supporting its streaming service launch and reducing its iPhone dependence. In 2018, the company planned to spend $1 billion on original programming and is expected to spend $4.2 billion by 2022.
Apple’s upcoming streaming service is expected to increase the share of service revenues, which has emerged as the new cash cow for the company over the last few quarters.
Apple currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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