Apple’s deal with Finisar Corp. could block the supply of components to Apple’s rivals that would be significant for products to enhance augmented reality (AR) features. The Cupertino-based firm collaborated with chip supplier, Finisar in a $390 million deal that completed on December 13.
Analysts claim that Apple could block supply of parts manufactured by the chip supplier for its rivals such as Samsung Electronics Co. Ltd., Huawei Technologies Co. Ltd., and others that develop AR features for their smartphones.
The investment in Finisar would enable the tech giant to acquire better supply of components at better price. Moreover, the deal would make it difficult for its competitors to acquire components for their smartphones.
The deal is a part of Apple’s plan to invest $1 billion in the U.S. manufacturing sector. The chip supplier outlined the deal does not imply debt or equity investment, but there would be business alliance between two firms over the period of time.
Finisar will reopen its long-closed, 700,000-sqare-foot manufacturing plant in Sherman, Texas. The plan would produce vertical-cavity surface-emitting lasers (VCSELs), a vital component of new FaceID system in the iPhone X.
These lasers play significant part in AR by enabling 3D mapping through sensors. With this deal, Apple gets control over components that are difficult to get and significant to develop AR features.
Though Apple has not been vocal about their future, Apple CEO Tim Cook expressed focus of the its future on AR, outlining it as “big and profound” technology shift.