iPhone Production Volume Up 5.6% in 2017

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Nearly one in every six smartphones manufactured this year will carry Apple Inc.’s (NASDAQ: AAPL) iPhone brand. The company is expected to build 227.5 million units in 2017, out of a global total of 1.43 billion.

For Apple, the year-over-year increase comes in at 5.6%, while the global total is up 4.8% compared to 2016. The Apple total includes all previous models, as well as the new phones to be introduced Tuesday.

The data were released this morning by Taiwan-based research firm TrendForce to coincide with Apple’s launch of the 10th anniversary iPhone.

TrendForce also expects 3D sensing module production to explode from around $1.7 billion in shipments this year to $14 billion in 2020 shipments. 3D sensing technology enables advanced augmented reality (AR) features expected to be included in the new iPhones.

Long-time Apple analyst Gene Munster at Loup Ventures said in early August that he expects Apple to ship 133 million units in the second half of 2017, of which about 55 million units (43%) will include advanced 3D sensing capabilities. Munster further forecast that about 40% of all iPhones shipped in the first half of next year will include the technology. As production capacity for the 3D modules increases, Munster expects 85% of iPhones shipped in the second half of 2018 to include 3D sensing.

Based on a bill-of-materials cost of around $20 per unit, Munster thinks 3D sensing will add about $100 to the cost of the phone, netting Apple a gross margin of 80% on the AR-enabled phones. That’s double the overall gross margin of around 40%.

TrendForce expects the 5.8-inch iPhone launched today will include an AMOLED (Active Matrix Organic Light Emitting Diode) screen, a technology already available in some high-end smartphones. According to TrendForce, AMOLED screens will be included on 43% of all smartphones manufactured in 2020.