Shulou(Shulou.com)11/24 Report--

CTOnews.com, February 23 (Xinhua)-- according to Nikkei Asia, Apple has chosen Chinese supplier Lixun Precision to help develop its long-awaited augmented reality device, the first time Apple has handed over a new category of devices to a Chinese supplier for development.

Lixun has taken over the Shanghai-based AR development team, which was previously owned by Taiwan's Pegatron, according to five people familiar with the matter.

This is a milestone for Chinese technology suppliers. For decades, Apple has relied on Taiwanese suppliers such as Foxconn to help it develop its first-generation new product line.

Pegatron, which has long assembled the iPhone for Apple, was the first supplier to help Apple develop AR devices, but the cooperation has been intermittent for four years. A supply chain executive familiar with the situation told Nikkei Asia that Pegatron had been producing Microsoft's Hololens hybrid reality for years, but was skeptical about Apple's AR plan and gradually pulled out of the project to focus on other applications such as cars and servers.

On the other hand, Lixun hopes to grab more business from Apple in as many areas as possible, four sources told Nikkei Asia. After years of development, the company has become Apple's most important supplier in China and has helped it make iPhone, Apple Watch and AirPods.

In addition, Foxconn is helping Apple with its AR project. Foxconn will focus on developing cheaper second-generation Apple AR devices in parallel, and will focus on automating mass production and improving production performance to help Apple reduce overall costs, four sources said.

Apple has high expectations for augmented reality technology and is fully tapping its supply chain to make its devices successful. Two of Apple's most important suppliers, TSMC and Sony, have been selected to develop micro OLED displays for the device, three people said. According to Nikkei Asia, part of the development of these displays has been carried out in Apple's secret park in northern Taiwan.

Micro OLED display technology is used in military goggles and is very expensive. The price of each micro OLED display is $150 (CTOnews.com Note: currently about 1035 yuan), an AR device needs a pair of such screens. For comparison, the OLED display used in the 6.1in iPhone 14 costs about $55 to $60.

In addition, sources said that according to the current development process, a 12-inch wafer can only produce dozens of such micro OLED display chips. Analysts say the cost of display technology and chips could push the retail price of Apple's AR headset to $3000 to $5000.

"Apple's first-generation AR devices will be very expensive and will only attract enthusiastic tech geeks or high-end customers," said one executive familiar with the matter. "but Apple wants to reduce prices to more affordable prices in second-generation devices developed in parallel, just like high-end Mac computers, and hopes to attract a larger user base."

Qiu Shifang, a technology supply chain analyst at the Taiwan Regional Economic Research Institute, said that Chinese suppliers used to be latecomers in Apple's supply chain, and Lixun's involvement in the development of new products shows that the company is becoming more and more important to Apple. It remains to be seen whether Apple's AR device, which may be expensive in the first generation, will become a hot product amid a global economic slowdown and rising inflation, the analyst said.

As of CTOnews.com 's release, Apple and Lixun Precision have yet to respond to this.

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