Smartphone camera makers see next opportunity in cars
07/08/2014 22:00
By Hyunjoo Jin
YONGIN, South Korea, Aug 8 (Reuters) - South Korean
smartphone camera makers are tapping the surging yet more
technologically demanding market for vehicle cameras to dull the
impact of slowing growth in global handset sales.
High-end cars can carry as many as eight cameras to visually
aid parking or trigger emergency brakes. That number could reach
12 when cameras replace side-view mirrors, according to Mcnex Co
Ltd 097520.KQ , a phone camera supplier of Samsung Electronics
Co Ltd 005930.KS and Korea's biggest car camera maker.
As the technology reaches mid- and lower-end cars, the
market for vehicle cameras could grow seven-fold from 2011 to
nearly $6.6 billion in 2018, said Techno Systems Research.
That amount can only rise with regulation such as compulsory
rear cameras in the United States from 2018 to stop drivers
backing into pedestrians. Also adding to demand will be the
spread of camera-laden self-driving vehicles like those of
Google Inc GOOGL.O . urn:newsml:reuters.com:*:nL1N0MS0ZO
"We expect the vehicle camera market to experience explosive
growth," Lee Hyo-cheol, a principal research engineer at Korean
auto parts maker Hyundai Mobis Co Ltd 012330.KS , told Reuters.
But cameras have to be far more robust for cars than phones.
They must withstand tests that include days of submersion in
water and 1,000 hours of temperatures shifting within seconds
between minus 40 degrees and plus 85 degrees Celsius.
"Vehicle cameras are completely different from mobile
cameras in terms of specifications," Lee said. Phone camera
makers have had to face a steep learning curve, he said.
Cameras for cars are priced around $32 each compared with $4
for phones, according to Mcnex, which earned 19 percent of
revenue last year from car cameras versus 2 percent in 2007.
Prices could fall, however, as volume grows.
About 83 million car cameras are likely to be sold in 2020,
five times more than in 2012, said researcher IHS Automotive. By
comparison, shipments of smartphones - which generally feature
two cameras - will likely grow 6 percent in 2018 from 39 percent
last year, according to researcher IDC.
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FROM APPLE TO BMW
Hyundai Mobis buys from compatriot phone and car camera
makers Mcnex, LG Innotek Co Ltd 011070.KS , and Sekonix Co Ltd
053450.KQ . It installs them into systems designed to aid
parking, for instance, which it then sells to sister carmakers
Hyundai Motor Co 005380.KS and Kia Motors Corp 000270.KS .
Hyundai's top-end car Genesis sports five cameras, including
cameras that sense whether the vehicle is veering out of lane.
LG Innotek, better known for the cameras in Apple Inc's
AAPL.O iPhone, started making vehicle cameras last year and is
in talks to supply luxury carmaker BMW BMWG.DE , said a person
familiar with the matter.
LG Innotek declined to comment. A BMW Korea spokeswoman said
LG Innotek is among companies it is in talks with.
Sekonix, which sells lenses to leading phone maker Samsung,
already supplies Hyundai Motor and General Motors Co GM.N
through Hyundai Mobis and Delphi Automotive PLC DLPH.N ,
respectively.
This quarter it will see its lenses in cars from Volkswagen
AG VOWG_p.DE and subsidiary Audi through parts maker Gentex
Corp GNTX.O , said a Sekonix official who was not authorised to
speak to media and so declined to be identified.
Sekonix declined to comment. Audi said Gentex was a customer
of Sekonix but could not confirm parts from Gentex featured
Sekonix products. Gentex did not respond to an emailed request
for comment and representatives at Volkswagen were not
available.
ADDING COMPLEXITY
The market for vehicle cameras, largely limited to high-end
models, is already crowded - particularly for suppliers of the
complete cameras comprising lens, image sensor and circuitry.
Panasonic Corp 6752.T and Sony Corp 6758.T lead in
parking cameras, according to IHS, and Continental AG CONG.DE ,
Robert Bosch GmbH ROBG.UL and Autoliv Inc ALV.N ALIVsdb.ST
dominate front cameras.
"It is very difficult to enter the automotive camera market
from supplying mobile phone cameras, especially the complicated
front camera market," IHS senior analyst Helena Perslow said by
email.
Continental and Robert Bosch also install software for their
front cameras to trigger brakes when 'seeing' an obstacle, for
instance, adding a layer of complexity.
Further back in the supply chain, smartphone lens makers
Haesung Optics Co Ltd 076610.KQ and Kolen Co Ltd 078650.KQ
are also on the verge of branching out.
Haesung has started looking for its first customer for
parking camera lenses, said an official who was not authorised
to talk to the media.
Kolen, however, is not yet marketing lenses it developed for
cars because there is so much competition that Kolen's entry
could trigger a price war, said an official who also declined to
be identified.
"The existing players will not sit still if we enter the
market."
Neither Haesung nor Kolen were available for comment.
(Additional reporting by Sophie Knight in TOKYO; Editing by
Tony Munroe and Christopher Cushing)
((hyunjoo.jin@thomsonreuters.com)(82-2-3704-5685)(Reuters
Messaging: hyunjoo.jin.thomsonreuters.com@reuters.net))
Keywords: AUTOS CAMERAS/