The successful history of Apple is essentially the development history of innovative man-machine interface of consumer electronic products.

In retrospect, after Apple successfully defined an innovative man-machine interface and produced it in large quantities, it will achieve great growth (such as Mac keyboard and mouse, iPod click wheel and iPhone/iPad multi-touch) and create many high-speed growth opportunities for parts and components.

We believe that MR/AR will be the next key technology to define innovative man-machine interfaces for electronic products, and we believe that MR/AR will provide innovative visual experiences and redefine human behavior in creating, processing and receiving information, which is why Apple is highly committed to MR/AR. We believe that one of the advantages of Apple is to define innovative man-machine interfaces, so we are looking at the future of Apple in MR/AR.

The launch of independent MR/AR hardware products is the key to success.

Although Apple has already released ARKit and equipped iPhone/iPad with LiDAR, it has not achieved obvious success in the field of MR/AR. The key lies in the lack of devices that operate independently and designed for MR/AR usage behavior. One of the advantages of Apple lies in ecological integration. We believe that after Apple launches MR/AR hardware products, it will accelerate ecological and industrial growth.

MR/AR is expected to replace all electronic products with display screens for a long time, and the potential business opportunities are huge.

We believe that one of the important ways for MR/AR products to provide an innovative experience in the first few years of rapid development is through integration with existing consumer electronics.

However, in the long run, we believe that MR/AR products have the potential to replace all electronic products with display screens, although this does not mean that electronic products with display screens will disappear instantly, but we believe that with the rapid development of MR/AR, the replacement cycle of existing electronic products with display screens will gradually become longer.

We predict that Apple's MR/AR product blueprint can be divided into three stages, namely, helmet (Helmet type) products in 2022, Glasses type (glasses) products in 2025, and contact lens (Contact lens type) products in 2030-2040.

We predict that helmet products will provide AR and VR experiences, while glasses and contact lens products are more likely to focus on AR services. According to the latest survey and understanding of the industry, we make the following predictions for the above devices.

Helmet products:

1. It is expected to be launched in mid-2022.

two。 At present, several prototypes weigh 200mura 300g. If Apple can successfully solve the key technical problems, the final weight of the finished product will be reduced to 100Pu 200g, significantly lower than all the current VR products.

3. This product will provide a Video see-through AR experience through the Micro-OLED display and several optical modules provided by the equipped Sony. As far as technology is concerned, this product also provides a VR experience.

4. The design complexity of this product is higher than that of the iPhone, which means that the price of the product may be similar to that of the high-end iPhone (we estimate that it is about $1000). Compared with iPhone, this product has a higher added value to EMS, so exclusive EMS is expected to benefit from this trend.

5. It has independent computing power and storage space.

6. The first generation of helmet products were positioned more like portable products than mobile products. When the technology improves, we think helmet products can also improve mobility.

7. We believe that the key to the success of the first generation of helmet products is to provide a very smooth display and operation flow for MR/AR applications.

8. Although Apple has always focused on AR, in terms of hardware specifications, we believe that the immersive experience (Immersive experience) that this product can provide is expected to significantly exceed the existing VR products. We believe that Apple may highly integrate this helmet product with image-related applications (such as Apple TV+, Apple Arcade, etc.) as a key selling point.

Glasses products:

1. It is expected to be launched as soon as 2025, and we believe there is no prototype at present.

two。 It is possible that a technology similar to optical waveguide (Wave guide) developed by Apple alone will be used to provide an optical penetration (Optical see-through) AR experience.

3. May have independent computing power and storage space.

4. Glasses products are positioned as mobile products.

5. We believe that the positioning of glasses products and helmet products is not exactly the same, so the two product lines may be parallel in the future. Helmet products provide an excellent immersive experience, while glasses products focus more on providing a "mobile + AR" experience.

6. We look forward to the integration of glasses-like products with Apple Car and provide an innovative user experience.

Contact lens products:

1. The launch schedule is uncertain. We predict that this will be the product after 2030.

two。 This product will bring electronic products from the "visible computing" era to the "invisible computing" era.

3. In terms of current technical visibility, this product is less likely to have independent computing power and storage space.

Investment advice:

We are looking at MR/AR trends and Apple headsets. We believe that the visibility of the Apple headset supply chain will be significantly improved in 2H21 and will be conducive to stock investment. At present, the main beneficiaries of helmet products include Sony (exclusive display supplier), Pegatron (exclusive EMS), and suppliers related to optical components.

Risk Tips:

The production of new products is delayed or the market demand is not as expected.