Apple's foray into smart home network cameras: Can it create another "iPhone"?

Apple's foray into smart home network cameras: Can it create another "iPhone"?Recently, Apple has been rumored to be entering a new business. Renowned Apple analyst Ming-Chi Kuo wrote that Apple is expected to begin mass production of smart home network cameras (IP cameras) in 2026

Apple's foray into smart home network cameras: Can it create another "iPhone"?

Recently, Apple has been rumored to be entering a new business. Renowned Apple analyst Ming-Chi Kuo wrote that Apple is expected to begin mass production of smart home network cameras (IP cameras) in 2026. This news has drawn significant attention, and Goertek (002241.SZ), rumored to be the exclusive assembler for this product line, has seen its stock price rise sharply.

Apple's entry into the smart home network camera market is not without precedent. In recent years, the concept of a smart home ecosystem has been steadily gaining momentum, and Apple's rivals, such as Xiaomi and Huawei, have already established very comprehensive industry layouts. At the same time, smartphones, as human-computer interaction terminals, are closely linked to smart home systems. By entering the smart home network camera market, Apple can expand its Internet of Things (IoT) industry layout while also enhancing the competitiveness of its own smartphone products.

Huge market potential, can Apple seize the opportunity?

Global demand for network cameras is steadily growing. According to data from SIGMAINTELL, the shipment volume of consumer-grade network cameras in 2023 was approximately 140 million units (including smart doorbells and locks), with about 90 million units being home network cameras, resulting in a total value of about $3 billion. The agency also predicts that the annual compound growth rate of demand for home network cameras over the next five years will be approximately 7.63%.

Apple has certain advantages in entering the smart home network camera market. Firstly, the Apple OS system is highly closed, offering stronger privacy protection for users compared to generic network camera devices. This makes it easier to attract loyal Apple users. Secondly, Apple has a vast user base and market potential. In 2023, there were approximately 1.46 billion active iPhones globally. These users are more likely to prioritize purchasing network camera devices from Apple when making their choices.

Liu Dayong, a senior analyst in the semiconductor division of SIGMAINTELL, believes that based on the market penetration rate of Apple's smartphones, laptops, and other mainstream products, its network camera devices could eventually achieve a market share of approximately 15% to 20%. After the product matures, it could generate annual revenue exceeding $2 billion, depending on its final pricing.

Suppliers benefit, can Goertek regain Apple's favor?

Ming-Chi Kuo stated that Goertek has entered the NPI (New Product Introduction) phase and will become the exclusive assembler for this product. Goertek did not directly deny the news but only told Cailian Press reporters, "We cannot disclose information about customer projects." However, in recent days, perhaps influenced by this news, Goertek's stock price has risen by about 9.65% as of the closing bell on November 13.

As we all know, since Goertek encountered Apple's "order cancellations" at the end of 2022, the company's performance has been significantly affected. In 2023, its revenue reached 98.574 billion yuan, a year-on-year decrease of 6.03%, and its net profit attributable to the parent company was 10.88 billion yuan, a year-on-year decline of 37.80%. At the same time, speculation surrounding Goertek's cooperative relationship with Apple has been rampant. This new order is not just a new revenue stream for Goertek but also signifies a warming of the company's partnership with Apple.

Ming-Chi Kuo wrote that Goertek's relationship with Apple has normalized since the second half of 2024, and the company's acquisition of NPI for two of Apple's new products in 2026 is proof. Given the low base in 2024, Apple's business is expected to improve significantly in 2025. Driven by the acquisition of NPI for the aforementioned two new products, Apple's business will see further growth in 2026.

Furthermore, Apple's traditional lens supplier Sunny Optical Technology (02382.HK), microphone supplier AAC Technologies (02018.HK), and other companies are also likely to benefit from this project.

Opportunities and challenges coexist, can Apple overcome price and privacy hurdles?

Apple's foray into a new field also presents difficulties. Liu Dayong believes that Apple devices are typically priced higher than comparable products, and consumers need to have a higher purchasing power. Additionally, the current geopolitical uncertainty has led governments and the public to pay more attention to privacy security. Network camera devices can access users' daily video recordings through the backend, which may raise concerns about privacy leaks, making people reluctant to install devices from overseas manufacturers.

Whether Apple can overcome price and privacy obstacles and successfully break into the smart home network camera market is a question that will require time to answer. However, it is certain that Apple's entry will bring new vitality and competition to this market, and it may also drive the further development of the entire smart home industry.