For apple chain manufacturers, "apple dependence" is a "sweet" burden. On the one hand, they avoid potential risks through diversified business layout, and on the other hand, they hope to deepen cooperation with Apple and share a bigger share.
Recently, after entering the fields of new energy vehicles and photovoltaics, Lansi Technology, a leading enterprise in the fruit chain, has invested an additional 3.9 billion yuan in the field of smart wear, setting its sights on the meta-universe. While this move has attracted attention from the industry, the reasons behind it are also worth paying attention to.
Starting from smart wear, fruit chain manufacturers "bet" on the metacosm
On April 7, Lens Technology issued the Announcement on Changing the Use of Part of the Raised Funds. According to the announcement, the company intends to increase the total investment of "Changsha (II) Park Smart Wearable and Touch Function Panel Construction Project" from the original 1.515 billion yuan to 5.406 billion yuan, and the project is expected to be completed and put into production by the end of 2024.
At present, Lens Technology has customers, products, technology layout and landing in the AR/VR field. This time, Lens Technology increased from 1.5 billion yuan to 5.4 billion yuan, with a "big hand" of 3.9 billion yuan to further increase the field of smart wearables, which is regarded by the industry as a move to "bet" on the meta-universe.
Regarding the reasons for the change of the investment project of the raised funds, Lens Technology said in the "Announcement" that in the field of smart wearable devices, the company is one of the earliest enterprises in the industry to start research and development and innovation of optical, structural and group functional parts molds, and has mass-produced products, with rich technical reserves and global high-quality customer resources. As market demand grows further, the company expects that existing capacity will not be able to meet customer demand.
The increase in investment shows the attitude of Lens Technology to support the smart wearable business as an important business growth point in the company's future. Lens Technology expects that the smart wearable business can achieve rapid growth in 2022.
"Lens Technology this time to increase the size of smart wear, or see the future in the meta-universe concept of AR / VR related business to bring great growth to the field of smart wearables, from this point of view this increase has a certain rationality." In addition, the application scope of smart wearable devices is relatively wide, and digital entertainment, medical care, education, pension and other fields may be involved. Zhang Yi, CEO and chief analyst of Ai Media Consulting, told the Reporter of China Electronics News.
In recent years, smart wearable devices have continued to develop rapidly and innovate, and are increasingly favored by consumers. According to market research agency IDC statistics, global wearable device shipments (smart watches, smart wristbands, wireless headphones, etc.) have reached 534 million units in 2021, an increase of 20% from 445 million units in 2020; global shipments of smart wearable devices are expected to reach 632 million units in 2024. At the same time, the emergence and rapid development of virtual reality (VR), augmented reality (AR) and other technologies have spawned new market demand and market share, in 2021, the global AR/VR headset market increased by 92.1% year-on-year, shipments reached 11.2 million units, and shipments are expected to increase by 46.9% year-on-year in 2022 and 35.1% by 2026.
It is worth noting that in addition to Lens Technology, Goertek and Luxun Precision, two other major fruit chain leading enterprises that are also in Apple's supply chain, have also looked at the AR/VR track and have already taken action. Among them, Goertek began to lay out VR in 2012 and entered the AR field in 2016; while Luxshare Precision entered the field of wearable devices in 2014, and also issued an announcement in February this year that it planned to raise no more than 13.5 billion yuan, of which 3.5 billion yuan will be invested in smart wearable device production projects.
Ma Tianyi, chief analyst of Minsheng Securities Communications and Meta-Universe, pointed out in an interview with China Electronic News that whether it is as an entrance or terminal of Meta-Universe or from the perspective of AR/VR market demand, smart wearable devices are relatively easy to use, but the current global consumer electronics market is not prosperous will have some impact on the demand for smart wearable devices.
"The uncertainty of the VR/AR market is large, mainly due to the fact that the industry itself has a process for market demand. At present, the 'metaverse' is still more at the conceptual level, and it is not yet known whether it will necessarily appear or transform in the form of VR/AR in the future. "Zhang Yi believes that for a company, increasing the layout and investment in the relevant fields of the meta-universe, there are still uncertainties in whether the future can get returns as scheduled, so the company should prepare a sufficiently flexible emergency plan."
Accelerate business diversification, or exacerbate "Apple dependency"?
Although Lens Technology is a "fruit chain" star enterprise, its performance over the years has not been stable. From the financial data of the past five years from 2017 to 2021, the company's net profit attributable to the mother was 2.047 billion yuan, 637 million yuan, 2.469 billion yuan, 4.896 billion yuan and 2.088 billion yuan, respectively. Behind the fluctuating performance reflects the phenomenon of "Apple dependence": in recent years, the first largest customer of Lens Technology has been Apple, and Apple's contribution to its total revenue from 2017 to 2020 has exceeded 40%. In fact, due to excessive dependence on Apple, the performance turmoil has been caused, which is the "bitter head" that many "fruit chain" manufacturers have tasted.
In March last year, the domestic optical giant OFILM encountered a single incident of "foreign specific customers" that caused strong concern in the market, and then confirmed that Apple excluded OFILM from its supply chain market. In January this year, OFILM issued a pre-loss announcement for 2021 performance, with an estimated loss of 1.9 billion yuan to 2.7 billion yuan, mainly due to the impact of the termination of the procurement relationship by specific overseas customers, and the shipment of related products fell sharply year-on-year.
On March 28 this year, as soon as the news of Apple's plan to cut orders for three major product lines such as iPhone13, iPhone SE 3, and AirPods came out, the "fruit chain" companies including Goertek, Luxun Precision and Lens Technology fell to varying degrees. Although this phenomenon can not simply "throw the pot" to Apple itself, because the problem of weak demand for electronic products is related to the global economy, but for many companies in the Apple industry chain, the basis for their survival is based on the huge volume of Apple, so a small fluctuation of Apple may cause a large shock to fruit chain manufacturers.
Of course, by deeply binding with Apple, these supply chain companies can often get rich capital market returns. However, some insiders pointed out that from the operational level, apple supply chain companies are difficult to make money, if the cost control is not good, it is likely to lose money.
How to break through the dilemma of "Apple dependence"? This is a problem that many fruit chain manufacturers have been thinking about, and diversified layout is one of the possible solutions.
Taking Lens Technology as an example, it has begun to enter the field of new energy vehicles since 2015, and has now established cooperative relations with well-known car companies such as BMW, Mercedes-Benz, Volkswagen, Ideal, and Weilai. As of the third quarter of 2021 annual report, the number of new energy customers of Lens Technology has increased to more than 20. At the beginning of November 2021, Lens Technology began to formally enter the photovoltaic field and set up a wholly-owned subsidiary, Hunan Lens New Energy Co., Ltd., mainly engaged in photovoltaic glass products, photovoltaic equipment and components, photovoltaic power generation projects and other businesses.
At present, the company's in-depth strategic deployment, investment, and technology research and development in important areas such as new energy vehicles, smart wearables, and consumer electronics metals are continuing to advance. This also confirms a sentence said by Zhou Qunfei, chairman of Lens Technology, at the 2016 shareholders' meeting: "Lens Technology will gradually become a one-stop platform like a supermarket, and customers can buy anything they want." ”
However, this time, Lens Technology has increased the layout of the meta-universe in the field of smart wear with a "big hand" of 3.9 billion yuan, which seems to be inseparable from Apple.
According to industry feedback, Lens Technology has set up an AR/VR research and business department to strengthen the research and functional module design in the fields of acoustics and optics, and has received support from core customers. As for whether the core customer refers to Apple, the answer is unknown.
"Judging from the layout and the growth of this company, it should be said that it is likely to strengthen cooperation with Apple, or Apple may have a layout in related markets." Some insiders told the "China Electronics News" reporter that from the perspective of the investment amount, it is obvious that Lens Technology is unlikely to lay out an emerging field alone, and it is very risky to do so.
In the context of the continuous heating up of the concept of "metaverse", Apple, Meta, Samsung, Microsoft, and Nintendo have announced plans for the layout of AR/VR hardware devices that are regarded as the entrance to the meta-universe. Analyst Ming-Chi Kuo reported in November last year that Apple would launch an AR/VR headset in 2022. At the same time, three Apple supply chain manufacturers, including Lens Technology, Goertek and Luxun Precision, have said that wearable devices such as AR/VR will be an important product direction for the company in the future. For these fruit chain manufacturers, it remains to be seen whether the "bet" metacosm will intensify or slow down the "apple dependence".
Zhang Yi pointed out that whether a company urgently needs to use some new business to expand its entire product line or production capacity scale, or wants to stimulate stock prices through some new concepts, it needs to be comprehensively and carefully considered according to the actual situation.