Analysis of the mobile phone periscope lens industry chain

In 2019, in the smartphone industry, an open and covert struggle over the "periscope lens" is intensifying. This will be another round of smartphone technology wars following the "full-screen war" and the "AI chip war."

On March 26, Huawei launched the P30 series and claimed that it was the first mobile phone product in the industry to adopt a periscope camera structure. Its most eye-catching design is the periscope camera structure, which achieves 5x optical zoom, 10x hybrid zoom and 50x maximum digital zoom, making it easy to take clear photos of the moon.

This is not the first time that a "periscope camera" has appeared in the industry. As early as the 2017 Mobile World Congress (MWC), OPPO released the 5x lossless zoom technology. At this year's MWC 2019, OPPO demonstrated the 10x hybrid optical zoom technology. The OPPO Reno series to be released on April 10 will mass-produce this technology.

▲ Huawei P30 series lens

High-magnification optical zoom has always been a hot spot in the demand for smartphone cameras. However, due to the trend of smartphones becoming thinner and lighter, the traditional camera module structure will not be able to meet the requirements of high-magnification optical zoom. Therefore, periscope cameras have entered the stage of mobile phone cameras, making long-distance zoom possible.

As the domestic smartphone market becomes saturated and shipments continue to decline, the improvement of mobile phone photography functions will become an innovative opportunity in the current competition for smartphone stocks. For example, the multi-camera system has become a new selling point for mobile phones. So what kind of development opportunities will the periscope camera structure, which has entered the mobile phone competition arena at the beginning of 2019, bring to the smartphone industry? This article will reveal it to you.

Periscope cameras usher in a new era of smartphone optical zoom

Mobile phone photography has a history of nearly 20 years, and it has experienced the baptism of the pixel war. Today, high pixels, optical image stabilization, large aperture, and dual cameras have become standard features of flagship phones. As users have higher expectations for mobile phone photography capabilities and mobile phone manufacturers continue to innovate in the field of optical photography, 3D sensing, multi-camera systems, and periscope high-power optical zoom have become the focus of future innovation in mobile phone photography, and mobile phone photography is getting closer to professional cameras.

▲Schematic diagram of the principle of optical zoom achieved through lens movement

The lens is a device that forms an image of the scene on the sensor, which is equivalent to the "eye" of the camera. It is usually composed of several lenses. When the light signal passes through, the lenses will filter out infrared and other stray light layer by layer. Therefore, the more lenses there are, the more realistic the image will be. In order to clearly capture objects at different distances, the camera needs to zoom.

Generally speaking, zooming is divided into two types: digital zoom and optical zoom. Digital zoom uses the processor in the camera to increase the area of ​​each pixel in the image, thereby magnifying the image; while optical zoom achieves zooming by changing the distance between the lenses, thereby changing the focal length of the lens.

Smartphones are designed to be lightweight and thin due to the need for portability. Therefore, mobile phones mainly use digital zoom and low-power optical zoom. Due to the thickness of the phone, the horizontally placed mobile phone camera can only have a small focal length, and the optical zoom capability is very limited. Currently, among smartphones with horizontally placed cameras, the one with the highest zoom ratio is the 3x optical zoom of Huawei Mate20 Pro. Optical zoom exceeding 3x will increase the thickness of the phone and deteriorate the user experience.

With the development of the industry, a new solution has emerged - the periscope camera structure.

This structure is different from the traditional parallel arrangement of dual cameras. The cameras that were originally arranged vertically are now arranged horizontally inside the phone, and a special optical prism is used to refract light into the lens group to achieve imaging, which can greatly increase the focal length of the camera.

▲OPPO periscope camera structure

OPPO is the first mobile phone manufacturer to launch a periscope camera. At the 2017 Mobile World Congress (MWC), OPPO first demonstrated the 5x lossless zoom technology based on the periscope camera structure and dual-camera. At the 2019 OPPO Innovation Conference on the eve of MWC 2019, OPPO first demonstrated the 10x hybrid optical zoom technology based on the periscope structure. According to OPPO, it has invested more than 200 people in the R&D team and laid out more than 100 R&D patents. It has polished and verified the motor, prism, module, algorithm and other aspects, and realized this technology with 100% customized modules. This new technology will be applied to OPPO's new brand Reno, which is about to be released.

▲The lens group structure diagram of Huawei P30 series

While Huawei and OPPO are ready to launch periscope camera phones, Xiaomi is also reported to be developing periscope lens products, but the progress is not as fast as Huawei and OPPO. Some netizens broke the news that Xiaomi's periscope lens is a joint solution with OFI Technology.

Some industry insiders believe that in addition to zoom shooting, periscope cameras have a potential function - merging the front camera with the rear camera. This concept holds that if the prism can be rotated 180° along the horizontal axis of the fuselage, the prism will be able to reflect the light in front of the phone into the photoreceptor to achieve forward shooting, and turning back to the original direction will be rear-facing shooting. However, from the current point of view, the stability problem of the prism in the periscope camera structure has not been solved, and the feasibility of merging the front and rear cameras has yet to be verified.

Difficulties in developing periscope camera structures

The core difficulty of periscope cameras is that the newly added glass material turning prism will bring about a series of chain reactions, including drop stability, lens quantity bottleneck, algorithm optimization, etc. This will bring new challenges and opportunities to optical lens and camera module companies.

First, for optical lens companies, periscope lenses add 1-2 pieces of glass material to turn prisms. In the past, most mobile phone lenses were plastic lenses, so periscope lenses will require mobile phone lens companies to have the design and manufacturing capabilities of glass optical components. In addition, periscope lenses will also open up space for the number of lenses in a single lens. In the future, 7p and 8p lenses will not be limited by the thickness of mobile phones.

Secondly, for camera module companies, the newly added glass turning prism will make the drop stability of periscope cameras far less than that of traditional cameras, which will place strict requirements on the assembly capabilities of module manufacturers. Complex camera components will also place new requirements on the algorithms and equipment of module manufacturers.

In terms of patents, Sunny Optical, Huawei, Truly Optoelectronics, Asia Optical (Taiwan), Crystal Optech, and OFILM have disclosed 9, 6, 5, 4, 3, and 2 periscope patents that are authorized or under review, respectively. These are only the cases of disclosed patents, and many unformed patents in research are not included. Among them, the components of the periscope camera modules of various companies are similar, including filters, lens groups, voice coil motors, reflective prism groups, and photosensitive chips. The differences between the periscope cameras of various companies are in the structural design.

As periscope cameras are increasingly used in smartphones, leading suppliers will continue to increase their market share in high-end smartphones, and companies in the relevant industry chain that have long-term layouts in plastic lenses, glass optical components, and optics will benefit further, such as core supply chain players such as Sunny Optical Technology, Largan Precision, Crystal Optech, and OFILM.

Zhang Nan, editor-in-chief of PChome Smart Mobile, told reporters that the most critical difficulty of periscope cameras lies in the design of reflective prisms, among which refraction transmittance and anti-shake design are two crucial difficulties. Huawei and OPPO respectively adopted different supplier solutions. Huawei adopted Sunny Optical's solution, while OPPO adopted another solution. It is not known whether it adopted the product of Crystal Optoelectronics or OFILM. However, Crystal Optoelectronics announced in January that its prism products for periscope cameras have been shipped in small batches.

Interestingly, when OPPO launched the 5x optical zoom technology in 2017, it was in cooperation with Sunny Optical. However, this time, Huawei joined hands with Sunny Optical, while OPPO turned to other companies. Zhang Nan also mentioned that currently, only these two suppliers are the best in the production of reflective prisms. Huawei and OPPO have signed agreements with these two companies respectively. At least in the next year, Huawei and OPPO will have a monopoly in the field of periscope cameras.

The periscope camera industry chain has both opportunities and challenges

Compared with the traditional dual-camera set, the periscope camera architecture requires an additional set of lenses and refractive lenses, which will also bring new market space to the entire camera industry chain.

In the field of mobile phone cameras, the optical lens, as a core component, is difficult to design and manufacture. Mobile phone cameras are mainly composed of optical lenses (Lens), voice coil motors (VCM), infrared filters (IRCF), image sensors (Sensors), etc. Among them, the design of the optical lens and the size of the sensor determine the camera performance of the mobile phone camera.

The main function of an optical lens is to collect the reflected light of the object being photographed and focus it on the image sensor by using the principles of light refraction and reflection. Optical lenses are very technically difficult, mainly in the design and manufacturing stages. Currently, there are relatively few manufacturers that can stably produce high-quality lenses in large quantities.

In terms of design, due to the high technical threshold, some experienced old factories have strong advantages. For example, Huawei cooperated with Leica, which helped Huawei improve the optical design of the lens. In terms of manufacturing, the yield and consistency of lens production are very critical. The mold, molding, assembly and other links have very high requirements for production accuracy. Any error in any link will have a great impact on the final imaging effect.

▲Market share of mobile phone lens manufacturers in 2017

In the mobile phone lens industry chain, Taiwan's Largan Precision is one of the earliest manufacturers to start research on plastic lenses. It has accumulated nearly 20 years of experience. Its lens quality and production yield are second to none in the industry. It is in a leading position in the industry, occupying 24.3% of the market share in 2017.

In the field of CMOS image sensors, Sony and Samsung have always been in the leading position in the industry. According to statistics from Yole, a well-known market research and strategic consulting company, in 2017, Sony accounted for 42% of the global CMOS image sensor market of US$13.9 billion, Samsung Electronics ranked second with 18%, and OmniVision Technologies ranked third with 12%, far exceeding other manufacturers.

Camera modules are devices that integrate various components together. The technical barriers in this field are not high, which also leads to a relatively fragmented domestic mobile phone camera module market. According to data from Asahi Research Institute, O-Film Technology ranked first in the domestic mobile phone camera module market in 2017, but its share was only 11%. In addition, Sunny Optical, Q Technology, Truly, Lite-On, Holitech, etc. are also players in the camera module supply chain, but their market share is only in the single digit.

Since smartphones do not have enough depth to accommodate telephoto lens components, with the trend of thinner and lighter bodies, the periscope camera is placed vertically or horizontally instead of at a high position, so as to achieve the coexistence of the telephoto lens and the thin body. Therefore, if you want to achieve an optical zoom of more than 5 times, you cannot avoid the periscope camera solution.

Periscope cameras usher in a new trend in smartphones in 2019

Although smartphone shipments have reached saturation and future growth is limited, mobile phone camera innovation is still in full swing. In the past two years, multi-camera systems will further penetrate high-end smartphones, including high-end cameras such as periscope cameras, 3D cameras, and large-size CMOS cameras.

In the long run, the huge gap in photographic performance between smartphones and SLR cameras will drive the continued development of the mobile phone camera industry. As for the emerging periscope cameras, according to the Guojin Securities Research Institute, the market size of periscope cameras is expected to exceed US$2.6 billion in 2020.

Although mobile phone cameras cannot replace SLR cameras, their performance will be close to that of SLR cameras. Compared with SLR cameras, the shortcomings of mobile phone cameras are the size of the image sensor (CMOS Image Sensor, CIS) and the zoom capability. The larger the size of the CIS, the more information about the light entering the camera is captured, and the better the restoration effect of the photo.

In the field of zoom, in order to pursue higher optical zoom, the optical path design of the lens group will be more complicated. From the current point of view, the periscope camera will become the only way for smartphones to achieve high-magnification optical zoom. The current zoom mainly relies on the cooperation of 2-3 fixed-focus lenses, the most important of which is the telephoto lens. The higher the zoom ratio, the higher the height of the telephoto camera. The thickness of the smartphone is not enough to support the height of the high-magnification telephoto camera, and the periscope camera is the most direct and effective way to solve this problem.

In the application field, as Huawei, OPPO, vivo and other leading mobile phone manufacturers pursue higher zoom capabilities, the overall improvement of the smartphone industry's photography capabilities will be driven. As the only way to high-magnification zoom, the market penetration rate of the periscope structure will further increase. According to data forecasts, Huawei's periscope camera shipments will account for 48.4% in 2019, while OPPO and vivo will account for 27.8% and 23.8% respectively.

However, periscope cameras will also bring about a new industrial structure within the industry chain. The accelerating pace of innovation in smartphone cameras and the all-round innovation in camera functions have put forward new requirements for the technology development and reserve capacity of related industry chain companies. Judging from the current competitive situation, in the future, small camera module and mobile phone lens manufacturers will not be able to invest more resources in the development of cutting-edge technologies in the competition, and the market share will further concentrate on the leading companies. Industry leaders have scale advantages, technical capabilities and customer resources that are ahead of their competitors, and have a unique advantage in the second half of the competition.

From the application perspective, the introduction of the periscope structure has not significantly improved the camera performance of mobile phones. Just like the full screen back then, although Xiaomi was the first to promote the concept of full screen, in the end, the full screen solution blossomed in the industry, and there was no distinction between which company was better. The same is true for the periscope camera structure. Huawei and OPPO, as pioneers, kicked off the prelude to the beginning of the periscope structure industry competition. In the future, innovation and competition around mobile phone camera capabilities will be more intense.

Conclusion: Photography capabilities will become the focus of smartphone competition

After mobile phones entered the stock market, smartphone manufacturers have been constantly launching new innovative content to stimulate users to change their phones. Whether it is the full-screen and multi-camera systems that were popular in the past two years, or the emerging concepts such as folding screens and 5G since this year, they are all becoming hot spots of competition in the smartphone market.

As the most widely used consumer electronic product, smartphones are becoming more and more versatile, and the ability to take photos has always been an important direction for mobile phone innovation. Driven by leading companies, multi-cameras and periscope cameras are expected to become the highlight of smartphone innovation in 2019.

As smartphone hardware innovation and competition continue to intensify, new opportunities in the industry chain have also arrived, and a new period of industry reshuffle has also arrived.