This Optical Player May Have Just Won An Exclusive Supply Deal With Apple

Apple Inc. (NASDAQ: AAPL) has signed an exclusive supply deal with Lumentum Holdings Inc (NASDAQ: LITE) for components that will make augmented reality and 3-D photography a central element of its upcoming of Apple iPhone 8, said Rosenblatt analyst Jun Zhang.

"The deal is for the supply of vertical-cavity surface-emitting lasers (VCSEL) used with Wafer Level Optics/Diffractive Optical Elements," he said.

Apple reportedly has been working on a rear-facing 3-D laser system that will enable better depth detection for augmented reality apps and more accurate autofocus in the iPhone 8, reports Fast Company, citing a source with knowledge of the company's plans.

The iPhone 8 is said to use a VCSEL system for the rear camera, which analysts have previously speculated could be added to the device.

“Our research suggests Apple has signed an exclusive supply deal with Lumentum on VCSEL laser supply for DOE/WLO structure light solutions; therefore, Chinese OEMs cannot use VCSEL+DOE/WLO solutions,” Zhang said.

“In our view, Lumentum’s VCSEL+DOE structure forms a unique pattern, which would be exclusive for Apple’s 3D sensing and help Lumentum maintain a lion’s share at Apple in 2018.”

A Lumentum spokesman declined comment.