Sharp’s Lens Unit CEO Sees Path to Defying Smartphone Slowdown
Smartphone Lenses manufactured by Kantatsu Co.
The mobile phone industry may be in a midst of a slump, but a unit of Sharp Corp.is forecasting growth thanks to the race by smartphone makers to wow customers with high-quality photos.
Kantatsu Co., a maker of camera lenses for Apple Inc. and Huawei Technologies Co., expects sales will rise 15 percent to 150 million units in the year ending March 2019, Chief Executive Officer Keiju Akutsu said in an interview. Kantatsu also plans to list shares on the Tokyo Stock Exchange next fiscal year, Akutsu said, declining to give further details.
The mobile-phone industry has hit aslowdown as global smartphone shipments fell 8.5 percent in the fourth quarter, according to researcher IDC. As markets from the U.S. to China grow more saturated and replacement cycles lengthen, manufacturers are looking to lure buyers with dual-camera models that offer wide-angle shots and the “bokeh” effect which blurs the background to give pictures a glossy, professional look. That means multiple lenses packed more densely in the same slim form factor, according to Simon Chan, a Bloomberg Intelligence analyst.
“The smartphone market may be flat this year, but the proportion of dual-camera phones is increasing,” Akutsu said in an interview at the company’s plant in Fukushima, north of Tokyo. “There is no such thing as general purpose lenses for us; every customer wants a custom order.”
To meet the demand, Kantatsu is boosting its total monthly output capacity by 20 percent to 30 million units by June 2019. The company’s two plants in Zhejiang, China already run at full capacity during peak times, limiting its ability to pursue new customers, Akutsu said.
Sharp, controlled by Foxconn Technology Group since a 2016 transaction, raised its stake in Kantatsu in March to 53.5 percent from 44.3 percent. The investment is part of Foxconn Chairman Terry Gou’s bid for greater control over the smartphone supply chain. The Taiwanese manufacturer assembles iPhones for Apple and has for about a decade tried to bootstrap its own lens business with little success. With Kantatsu under its umbrella, Gou can now take on Apple’s main lens supplier Largan Precision Co.
“Foxconn is trying to integrate vertically, because components offer good margins,” said Chan. “Having access to components in-house can also make its assembly smoother.”