A Tetraprism camera for the iPhone 16 Pro is now more likely says top analyst

The iPhone 15 Pro Max is the first iPhone ever to be equipped with a periscope lens. To increase the focal length of a smartphone camera without having the lens stick out from the body, a tube runs down the length of the inside of the phone with a prism placed at a 90-degree angle at the end of the tube. Light enters from the lens and bounces off the prism to the image sensor thus extending the focal length of the lens far beyond what it could be otherwise.

Apple's implementation of the periscope lens is called the Tetraprism zoom camera because it uses four prisms to extend the focal length to 120mm delivering 5x optical zoom. Jon McCormack, Apple's VP of camera software engineering, explained why Apple decided to cap the optical zoom capabilities of the Tetraprism zoom at 5x when he said, "The 5x zoom is something that we can stabilize incredibly well. If you look at the 10x zoom, unless you have the steadiest hands in the world or a tripod, it's really difficult to use." This is the same reason why Samsung is reportedly replacing its 10x optical zoom lens on the Galaxy S24 Ultra with a 5x optical zoom.

There have been rumors that Apple will add the Tetraprism lens to the iPhone 16 Pro next year so that both iPhone 16 Pro series models will have it. TF International's Apple analyst Ming-Chi Kuo has an amazing reputation and Kuo says that improved manufacturing yields for the company that supplies Apple with the Tetraprism lens assembly, Largan, is the reason why Apple is adding the feature to the iPhone 16 Pro in 2024. 

Originally Kuo cited the expected increase in the size of the iPhone 16 Pro's display from 6.1-inch to 6.3-inch as the reason why Apple could include the periscope lens in the iPhone 16 Pro model. That was back in March, well before Apple released the phone with its first periscope lens, the iPhone 15 Pro Max. Last month, Kuo once again repeated his forecast calling for both iPhone 16 Pro models to feature a Tetraprism zoom camera in 2024.

大立光潛望鏡鏡頭良率/獲利顯著提升，為2024年潛望鏡相機顯著成長的主要受益者 / Largan’s periscope lens yield/profitability improves significantly, positioning it as a major beneficiary of the substantial growth of periscope cameras in 2024https://t.co/ysUk7QYrM1

— 郭明錤 (Ming-Chi Kuo) (@mingchikuo) November 21, 2023

But today Kuo has added another reason why, besides the larger iPhone 16 Pro screen size, Apple can include a periscope lens with the iPhone 16 Pro. That is Largan's ability to raise its production yield on Tetraprism zoom cameras from 40% during the third quarter of this year to 70% during the fourth quarter of 2023. Kuo notes that at a 40% production yield, Largan's gross margins were negative, and making the product for Apple lowered the firm's earnings per share figure.

But now that Largan has hiked its yield to 70%, Kuo says that making the Tetraprism zoom camera is now profitable for Largan and will add to its fourth-quarter earnings per share. And since Largan can now produce more Tetraprism zoom cameras, it can make enough to supply the iPhone 16 Pro along with the iPhone 16 Pro Max. By adding a periscope camera to the iPhone 16 Pro, Kuo expects Apple to ship 160% more premium iPhone 16 Pro series units next year compared to the number of iPhone 15 Pro and iPhone 15 Pro Max units delivered this year.

Kuo says that Apple and Huawei are the two fastest-growing smartphone brands in global periscope camera smartphone shipments. Huawei's flagship models for the first half of 2024, the P70, P70 Pro, and P70 Art, will all feature periscope lenses. Compared to the P60 line released earlier this year, Kuo forecasts a 100% increase in shipments for Huawei's photography-focused flagship series.

Largan, says Kuo, will supply 85% to 90% of the Tetraprism zoom cameras being used by Apple in 2024 and 50% to 60% of the periscope lens assemblies used by Huawei. With yields improving and Apple and Huawei ordering more periscope cameras from Largan, Kuo says that the company's profits next year will top Wall Street expectations. More importantly, it means that Largan can supply Apple with enough Tetraprism zoom cameras to allow iPhone 16 Pro buyers to experience 5x optical zoom.