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Yole sees 3D sensing market topping $16BN by 2027

12 Jul 2022

Market analyst sees applications starting to blossom outside of smart phones.

An updated report from France-headquartered market analyst firm Yole Développement suggests that the market for 3D sensing technologies - based around photonic components including VCSELs, optics, and photodetectors - will rise to $16.7 billion by 2027.

The current market remains closely allied to the popularity of iPhones - sales of which soared in 2021 - with Yole’s Richard Liu pointing out that Apple continues to drive the market upwards as it pushes for more 3D sensing in its products.

“As expected, in 2021, the Android smartphone camp saw no progress in mobile 3D sensing,” said Liu, an analyst covering imaging and display technologies at Yole.

“However, the leading smart phone manufacturer, Apple, continues to adopt 3D camera solutions in both front and rear applications, even updating face ID, by simplifying and shrinking its optical structure. That’s Apple’s strategy to push 3D sensing on its phones, further appealing to consumers.”

Largely as a result of that push, the market for 3D sensing technologies in mobile and consumer applications rose to $3.6 billion - or 326 million units - last year, slightly higher than Yole had predicted earlier.

Android challenge
Liu indicates that there are two main challenges to the adoption of 3D cameras in Android phones: firstly the competition from alternative sensing and security features, for example under-display fingerprint sensing, which are cost-effective and work well.

But the second reason, which Yole sees as more significant, is simply a shortage of applications.

“If a 3D camera is placed on the rear of the phone, there should be at least one killer application for daily use,” said the firm. “But there are only a few AR [augmented reality] games or other infrequently used applications.”

But despite that lack of progress, the rate of penetration of 3D sensing in mobile phones is still increasing, because Apple has gained market share against its Android rivals.

Yole suggests that the Android ecosystem will need to deliver the same functionality as Apple, and perhaps even surpass it, to register significant impact.

“Once Android phones adopt this strategy, 3D sensing will return to Android phones,” says Yole, noting that China’s Honor - the consumer electronics brand spun off by Huawei in late 2020 - has adopted 3D sensing in the front-facing camera of its flagship phone, the Magic 4 Pro, for facial security.

“We assume it is just using it on its flagship models, similar to Apple,” said Yole, adding that it expects the market for 3D sensing in mobile phone applications alone to rise to $6.6 billion in 2027, at a compound annual growth rate of nearly 12 per cent.

Metaverse ‘needs’ 3D sensing
“In addition to mobile phones, 3D sensing is blossoming in other industries,” adds the analyst firm. “As 3D sensing has temporarily come to a standstill in Android phones, upstream device suppliers or integrators have to work hard to open up other consumer markets.”

Examples include smart door locks, robot cleaners, and smart fitness devices, while Yole believes that in recent months the concept of the “metaverse” has stimulated a new understanding of 3D sensing for the emerging market.

“The metaverse desperately needs 3D sensing technologies, such as virtualized worlds and digitization, and ways of interacting in virtual worlds, such as eye and lip tracking,” said the company.

“This will greatly incentivize more players to participate in developing 3D sensing technology.”

Outside of the consumer space, traditional lidar techniques are seen as suitable for many topographic and industrial applications. But with the rise of machine vision, Yole expects to see 3D cameras performing more delicate and complex work in manufacturing, logistics, and public security settings.

Another area with massive potential is the automotive sector, where 3D sensing for advanced driver assistance is just starting to emerge.

According to Yole’s figures, 3D sensing in automotive applications will rise from just $530 million in 2021 to exceed $3 billion in 2027.

• For more information on Yole’s latest 3D Imaging and Sensing report, click here.

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