Apple Manufacturer Quanta Reaches Deal to Build AR Displays

(Bloomberg) -- Quanta Computer Inc., one of Apple's main manufacturing partners, has struck a licensing agreement with augmented-reality component maker Lumus Ltd. to make lenses for smart glasses.

Israel-based Lumus designs displays for AR glasses that will project information into the wearer's field of view. As part of the deal, Quanta will manufacture the lenses for Lumus and then have the option to produce the component for leading consumer technology companies, Lumus Chief Executive Officer Ari Grobman said. Quanta led a $45 million investment in Lumus in late 2016. Several of the largest technology companies, including Apple Inc. and Microsoft Corp., are developing AR hardware.

"This means that the most expensive key enabling technology in the AR glasses teardown will now be affordably priced, effectively bringing down the overall cost of consumer AR glasses," Grobman said in an interview. "Quanta has suggested that full AR headsets would be priced for less than the cost of a high-end cell phone. That's a big deal.”

Apple is developing an AR headset that would integrate with digital assistant Siri, and display maps and text messages to the wearer, Bloomberg News reported last month. The Cupertino, California-based company plans to have its AR technology ready by 2019 for a release as early as 2020. Lumus expects headsets with its technology to reach the market within 12 to 18 months. Grobman wouldn't say whether Lumus and Quanta are working on Apple's glasses.

While Apple designs and develops its hardware, it often works with outside manufacturers and component suppliers to bring its products to market in high volumes. For example, the iPhone X's new screen is made by Samsung Electronics Co. and the iPhone itself is assembled by Hon Hai Precision Industry Co., a unit of Foxconn. 

Some other products, like the Apple Watch and Mac laptops, are manufactured by Quanta, which gets almost 60 percent of its revenue from Apple, according to data compiled by Bloomberg. It has other consumer technology giants as clients, including HP Inc. and Acer Inc. Quanta declined to comment.

The Economic Daily News reported recently that Apple is working with Quanta to manufacture its AR headset. C.C. Leung, Quanta's vice chairman, recently told reporters that his company is "working on an AR project and have studied the optical technologies that AR devices have needed since two years ago," according to Japanese news service Nikkei. "Currently, we see such a device available in the market no later than the year 2019," he reportedly said.

To contact the reporter on this story: Mark Gurman in San Francisco at mgurman1@bloomberg.net.

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Alistair Barr, Andrew Pollack

©2017 Bloomberg L.P.