Finisar deal helps Apple block Android rivals’ path to AR features

“Apple Inc’s million deal with chip supplier Finisar Corp announced on Wednesday helps lock in the supply of a component that Apple believes will play a big role in its future products by bolstering augmented reality features,” Stephen Nellis reports for Reuters. “And because the parts Finisar supplies are new and in extremely limited supply, the deal also helps Apple lock out Samsung Electronics Co Ltd, Huawei Technologies Co Ltd and other competitors in the premium smartphone space that are working to develop similar features, analysts said.”

“The investment will enable Apple to ‘get better supply and better pricing, and it makes it more difficult for Android phones to compete,’ said Gene Munster, a longtime Apple watcher at Loup Ventures,” Nellis reports. “Apple awarded Finisar $390 million from a $1 billion fund dedicated to American manufacturing… Finisar will re-open a long-shuttered, 700,000-sqare-foot manufacturing plant in Sherman, Texas, to produce VCSELs, short for vertical-cavity surface-emitting lasers, a critical component of Apple’s new FaceID system in the iPhone X. Apple has not said what company supplied the first round of lasers, but Lumentum Holdings Inc. has seen a surge of business attributed to a single customer that analysts believe is Apple.”

“The lasers go into sensors that enable 3-D mapping, which in turn is a critical part of augmented reality, in which digital objects are overlaid on the real world. The more accurately depth sensors map the real world, the more precisely digital objects can float in it,” Nellis reports. “The lasers that are critical to AR are hard to come by because there is no existing supply chain like there is for older, more common chips. Apple said that in the current calendar quarter ending Dec. 31, it has bought more than 10 times as many of the lasers as had ever been manufactured over a similar time frame.”

Read more in the full article here.

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With each passing year, and especially with iPhone X, it becomes increasingly clear – even to the Android settlers – that the competition has no chance of even remotely keeping up against Apple’s unmatched vertically integrated one-two punch of custom software and custom hardware. The Android to iPhone upgrade train just turned onto a long straightaway, engines stoked, primed to barrel away! — MacDailyNews, September 13, 2017

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• In order to build the best products, you have to own the primary technologies. Steve felt that if Apple could do that — make great products and great tools for people — they in turn would do great things. He felt strongly that this would be his contribution to the world at large. We still very much believe that. That’s still the core of this company.Apple CEO Tim Cook, March 18, 2015

Apple makes Trump-friendly investment in Finisar – December 13, 2017
Apple is backing up iPhone X’s Face ID and AirPods with American jobs – December 13, 2017
How Apple and Finisar are transforming the future of Sherman, Texas – December 13, 2017
Apple awards $390 million to VCSEL-maker Finisar; award will create 500 high-skill jobs at Sherman, Texas facility – December 13, 2017
Apple’s custom silicon sets their products apart – December 7, 2017
Apple ships more microprocessors than Intel – October 2, 2017
Ming-Chi Kuo: Apple’s TrueDepth camera system puts iPhone X years ahead of Android competition – October 2, 2017
iPhone 8’s Apple A11 Bionic chip so destroys Android phones that Geekbench creator can’t even believe it – September 30, 2017
Apple’s A11 Bionic chip is by far the highest-performing system on the market; totally destroys Android phones – September 19, 2017
Apple’s A11 Bionic chip in iPhone 8, 8 Plus, and iPhone X leaves Android phones choking in the dust – September 18, 2017
The inside story of Apple’s amazing A11 Bionic chip – September 18, 2017
Apple’s A11 Bionic obliterates top chips from Qualcomm, Samsung and Huawei – September 18, 2017
Apple accelerates mobile processor dominance with A11 Bionic; benchmarks faster than 13-inch MacBook Pro – September 15, 2017
Apple’s A11 Bionic chip in iPhone X and iPhone 8/Plus on par with 2017 MacBook Pro – September 14, 2017
Apple awards Corning $200 million in first Advanced Manufacturing Fund investment – May 12, 2017


  1. I doubt Apple’s investment in Finisar Corp. will hurt the Android smartphone platform to any degree. All those Android smartphone manufacturers are very tenacious. They’ll manage to survive, as usual. Most smartphones on the planet aren’t high-end flagships and most consumers will be happy using their low- and mid-range smartphones. The most consumers require from Android smartphones is their low initial cost. Consumers mostly buy what they can easily afford. No 3D facial recognition is required. Most consumers will have absolutely no interest in AR-enabled smartphones. It’s likely 90% of all Android smartphones next year will still be using fingerprint sensors.

    Next year the analysts will be saying the same thing about Apple’s iPhone business being destroyed by every Android smartphone manufacturer in the world. Apple will still be said to be losing global smartphone market share to Android as they do every year. Apple building more expensive iPhones certainly won’t turn the tide.

    1. Apple has been using its money in exactly this way for many years and will continue to do so because it works very effectively, giving Apple an advantage while simultaneously locking out those who might want to copy those ideas.

      Readers may remember when MacBooks first were milled from ingots of solid aluminium. The process required the use of incredibly specialised CNC milling machines and no manufacturer anywhere in the world had anywhere near enough of them to supply Apple with sufficient numbers of finished components.

      Apple’s solution was to finance the purchase of lots of those machines and for them to be exclusively used for Apple’s production requirements. When other companies thought it would be cool if they too produced devices milled from solid aluminium, they discovered that there was no manufacturing capacity available anywhere as Apple had contracts with them all.

      It’s been viewed in different ways. Sometimes as pre-purchase of components and sometimes as investing in new technology in return for cutting edge components, but it boils down to the same thing. Apple pays a lot of money up front and in return benefits exclusivly from that technology.

  2. At the rate tech development moves I doubt this will be a roadblock. By the time the main body of Android devices have need to incorporate the laser in sensors there will probably other vendors to purchase them from to put in the sensors built by yet another company.. The Android Army is resilient if anything.

    1. “By the time the main body of Android devices have need to incorporate the laser in sensors … ” = We never would never have thought of this by ourselves so aren’t prepared for it, but Apple has again shown us how it should be done.

      “The Android Army is resilient if anything.” = Copying is so much easier than innovating, as long as you din’t mind always playing catch up.

      1. Nice spin, though Apple does just the same with many features in the software UI.

        “Copying is so much easier than innovating, as long as you din’t mind always playing catch up.” No sense copying if you’ve been ‘blocked’ by Apple appropriating the entire supply, you simply flow around it like water and develop a different method to achieve a similar and sometimes better result. I suspect Samsung (or other Android OEM) will come out with an under display fingerprint reader before Apple does.

        Between Sony’s new tech for printing (not vacuum depositing) OLED displays and Samsung’s work on flexible displays I wouldn’t be surprised if Apple is left far behind on even thinner display components that are also shatterproof.

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