Robert Bosch GmbH has won orders from Apple Inc to supply the next iPhone with some of its motion sensors, according to a person familiar with the deal.
It is a potential blow to InvenSense Inc, the main supplier of those smartphone components.
The change — hinted at by InvenSense’s chief financial officer in August last year — comes as the San Jose, California-based maker of motion-sensing chips seeks to complete its US$1.3 billion sale to TDK Corp, a deal partly aimed at boosting the Japanese company’s business with Apple.
Photo: Reuters
Bosch might supply as much as half of these components for the new iPhone, with InvenSense supplying the rest, the person said.
Bosch already supplies barometric pressure sensors for the iPhone, according to product teardowns by iFixit and other firms that analyze the guts of gadgets.
“People believe that the acquisition is going to go through,” Robert W. Baird analyst Tristan Gerra said. “The share loss scenario may be something that TDK had already considered.”
Rather than an existing revenue stream from supplying Apple, TDK might be more interested in InvenSense’s suite of technologies suited to growth areas like driverless cars, drones and the Internet of Things.
The risks of losing Apple as a customer were highlighted by chip developer Imagination Technologies PLC, which last month said that the iPhone maker would stop using its intellectual property within two years.
Apple chief executive officer Tim Cook tries to source components from at least two suppliers, making it easier to negotiate cheaper prices. Apple accounts for about 60 percent of InvenSense’s revenue, according to Bloomberg supply chain analysis.
Apple is expected to unveil a major upgrade to the iPhone later this year to mark the 10th anniversary of the groundbreaking device. Analysts expect consumers to buy millions of the new gadgets, generating huge orders for component suppliers.
The components produced by Bosch and InvenSense contain gyroscopes and accelerometers. Gyroscopes can tell if a phone is being held horizontally or vertically, being shaken, or pointing in a particular direction. An accelerometer detects different movements, such as side-to-side motion. Together, the sensors help measure step count, and they are useful for mobile games and augmented reality applications. In the iPhone 6S and iPhone 7, these were supplied exclusively by InvenSense, according to teardowns.
InvenSense chief financial officer Mark Dentinger said at an August investor conference that as recently as 2014 it was dominant “by a considerable margin” at the top end of the smartphone market.
“We’re still the largest player, but we are splitting some share now with our primary competitor,” he said. “Historically, it’s unlikely that most of our customers will have just one supplier over a long, long period of time.”
TDK, which rose to prominence on cassette tapes in the 1970s, has since expanded into batteries, automotive components and now the Internet of Things. The Tokyo-based company received regulatory clearance to acquire InvenSense on April 18.
“We aim to become a strong player in the sensor business with InvenSense as our perfect partner,” TDK CEO Shigenao Ishiguro said at the time.
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