IPhone 12 Camera Production Runs Into Quality Issues, Apple Launch Plans May Not Be Affected

iPhone 12 lineup is reported to have met with camera quality issues during production. One of Apple’s key suppliers, Genius Electronic Optical, has run into quality issues with camera lens production. KGI Securities analyst Ming-Chi Kuo has mentioned that Apple looks to turn to its other main camera lens supplier Largan to make up for the lost order. Genius’ profits are expected to be impacted because of this. This is touted to be a minor hiccup, and is not expected to affect Apple’s launch schedule.

Kuo’s latest investor note, accessed by MacRumors, details the issues faced by Genius. The supplier unfortunately discovered that the wide-angle camera lenses for the lower-end 5.4-inch and 6.1-inch ‌iPhone 12‌ models are seeing some cracking coatings during high-temperature/high-humidity (HTHH) testing. This quality issue will cause Genius some delays in supplying camera components for the upcoming iPhones. However, Apple is expected to look at Largan to supply in more quantities.

Kuo claims that Largan is experiencing no such quality issues, and is on schedule for supplying components to Apple. Largan looks to gain from this mishap. “We estimate that the low-end 7P wide-angle lens, CCM, and final assembly mass production of the 5.4-inch and 6.1-inch aluminium frame iPhone will be in mid-to-late August, mid-to-late September, and early October, respectively. We believe that in the uncertain timetable for [Genius] to solve the quality problem of film cracking, Apple will give priority to purchasing Largan’s low-end 1/2.6” 7P wide-angle lens at least in the initial supply stage to ensure that the two aluminium-framed ‌iPhone 12‌ can be as scheduled,” Kuo is reported to have written in his note.

Apple looks to fulfil its initial supply from Largan and the launch schedule is not expected to see any further delay because of this production issue. However, Genius’ lapse in product quality may impact its profits and the company my need to cut its prices by 30 percent as an incentive to gain Apple’s orders back.

Apple CFO Luca Maestri has already confirmed a slight delay in iPhone 12 series availability this year due to several supply chain issues. Maestri, during an earnings call last month, confirmed that Apple projected a delay in supply by a few weeks. There’s even a report that seems to claim a phased launch approach this year, wherein the company is reported to first launch two 6.1-inch iPhone models initially and then later introduce the small 5.4-inch iPhone model and the large 6.7-inch model.