With the unit price significantly reduced: mobile phone lens manufacturers "advance" and "retreat"

"The unit price of mobile phone lenses has dropped significantly this year. Among them, the unit price of some mobile phone lens models has dropped by nearly half." In response to the current status of the mobile phone lens market, a senior industry insider who has been deeply involved in the mobile phone camera market for a long time admitted.

The person said that the price of a 13-megapixel mobile phone lens has dropped from more than 3 yuan to more than 2 yuan, which is about 1 yuan lower. The price of an 8-megapixel mobile phone lens was more than 2 yuan before, but now its price has also dropped significantly. He said, "With the big players squeezing into the mobile phone lens market and fierce market competition, the price of mobile phone lenses has been falling since the beginning of the year."

Having said that, in the fierce and even white-hot battlefield of mobile phone lenses, although there are many players, the leading player Largan has always adhered to the strategic measures of the "regular army" leader in leading the innovation of mobile phone lens technology. Some people think that since the demand for high-end mobile phones has decreased, can't it take some product orders for low-end mobile phones?

Lin Enping was quite persistent. He said he would not accept orders even if it was not profitable just to fill production capacity.

A mobile phone camera module salesperson told Jiwei.com that, in fact, in order to get projects, domestic mobile phone lens manufacturers have generally lowered their prices. Largan is the leading mobile phone lens company, and although the unit price of Largan's mobile phone lenses has also declined, they have a "bottom line."

At the same time, the person also revealed that Largan did not make automotive lenses before, but now they do, and one of its major customers for automotive lenses is Tesla.

Largan's retreat and advancement

In the camera era, Leica, Zeiss, Nikon, and Canon have an unshakable position in the fields of SLRs, camcorders, etc., and they occupy the "glass lens camp".

The rise of mobile phones has completely overturned the original "glass lens" situation.

In 2003, high-end mobile phones represented by Nokia, Motorola and Samsung were all equipped with cameras. At this time, plastic lenses met the needs of mobile terminal manufacturers due to their low cost and high yield.

This trend created opportunities for Largan, because in 1991, after its establishment, Largan successfully mass-produced plastic aspherical lenses. In 2002, the company successfully developed mobile phone lenses. In the same year, it successfully developed a 3-megapixel triple optical zoom lens for digital cameras.

At that time, since the unit price of mobile phone lenses was not a big business and could not be compared with high-end glass lenses, other companies were unwilling to bet too much and either hesitated on the technology route or hesitated on R&D investment.

This situation continued until the birth of Apple.

In order to bet on the future of the track, Largan Precision not only vigorously developed research and development, but also quickly expanded production. In 2003, in order to expand production capacity, Largan Precision reduced manufacturing costs and invested in Suzhou Largan Precision Co., Ltd. In the same year, the company completed the expansion of its first factory; in 2005, Largan Precision completed the expansion of its second factory.

In 2007, Apple released its new generation iPhone. Not surprisingly, Largan became one of its suppliers. In front of its competitors and customers, Largan took out its regular army's "patented weapons."

Eventually, Largan reached a settlement with Yujingguang and Samsung, which it had accused, and the latter became a major customer of its mobile phone lenses. Today, Largan has been the main supplier of high-end lenses for Apple mobile phones. At the same time, it has mastered the production of lenses for high-end mobile phone lenses. Whether it is the lenses for Huawei's high-end phones or the ancestral 12-megapixel lenses of the iPhone, they are basically produced by Largan.

However, in 2021, Largan Precision took "advance and retreat" to the extreme.

At the beginning of this year, due to the shortage of components and the fact that the high-end market performed worse than expected, Largan took on more orders for mid- and low-end mobile phone lenses at reasonable prices.

Faced with the situation of declining unit prices of mobile phone lenses, some people think that since the demand for high-end mobile phones has decreased, can’t Largan take some product orders for low-end mobile phones?

Lin Enping was quite persistent. He said he would not accept orders even if he did not make money just to fill production capacity.

In the automotive lens market, Largan made a strategic adjustment this year. In 2019, Largan chose to withdraw from the automotive lens market after more than five years of layout. Largan’s senior management once privately described: "From the price to the quantity of automotive lenses, it is very painful for mass production (optical factories) operators. Looking at the orders for automotive lenses, it seems that a few zeros are missing."

Today, Largan Precision has reappeared in the automotive lens field. Lin Enping frankly said that since the demand for automotive lenses from existing major customers has grown beyond expectations and customers want continuous supply, in order to focus resources more, he decided to set up a new company, named Dagen Industrial, with a capital of NT$1 billion. Currently, there are two major customers for automotive-related products.

Mainland China lens manufacturers: radical strategy

However, in the mobile phone lens market, Largan's advantages are also being eroded.

In 2018, Largan's dominance in the field of mobile phone lenses was challenged by mainland manufacturers for the first time. Sunny Optical's lens shipments exceeded Largan's for the first time that month.

Nowadays, in the Android camp, the mobile phone lenses in new terminal mobile phones are more likely to use Sunny Optical's mobile phone lens products.

In the thousand-yuan phone camp, Jiwei.com noticed that mobile phone lens manufacturers such as O-Film, Sunny Optical, AAC Technologies, and Star Optical appeared in the Honor Play5 Vitality Edition thousand-yuan phone.

For an order of a thousand-yuan phone, multiple lens manufacturers are involved, so you can imagine the level of competition.

However, although Largan's mobile phone lens products are impeccable in the high-end mobile phone lens market, Largan has no advantages in the fierce mid- and low-end mobile phone market.

Because, in terms of price, as Lin Enping said, he would not accept unprofitable orders for mobile phone lenses just to fill production capacity, but the strategy of domestic manufacturers is quite radical.

According to industry insiders, in order to grab orders, mainland mobile phone lens manufacturers adopt low-price strategies to obtain customer orders. Currently, the unit prices of mobile phone lens products of mobile phone lens manufacturers are declining. Among them, the unit price of 13 million mobile phone lenses has dropped from more than 3 yuan to more than 2 yuan, which is basically reduced by about 1 yuan; the unit price of 8 million pixel mobile phone lenses was more than 2 yuan before, and now its unit price has also dropped significantly.

An industry insider bluntly stated that "big companies can afford to lose money, small companies need to survive, and small companies are even more difficult to survive in this competitive environment." However, Jiwei.com observed that as of now, in order to gain more market share, some lens manufacturers still choose to expand production in such a fierce environment.

In this regard, an industry insider told Jiwei.com: "In this environment, not expanding production will only put you in a passive position, but after expanding production, you will at least have a fighting chance."

He believes that the optical market is huge and the market is constantly changing. This is mainly due to the sharp decline in mobile phone sales and the low-price strategy of competitors, which has led to a sharp decline in the unit price of mobile phone lens products this year. However, there are obvious business opportunities in the non-mobile phone lens market.

At the same time, it is taking a wait-and-see attitude towards the mobile phone lens market next year. For the entire mobile phone lens manufacturer, the era of super high gross profit margin may have passed, but under the radical strategy, more listed companies may be born in the mainland.