Anybody who follows Apple (NASDAQ:AAPL) knows that the latest entries in the company's premier iPhone lineup get the innovative new technologies first. Examples include camera technology, Touch ID, 3D Touch, and much more.
This is due to two simple facts. First, on a per-unit basis, the iPhone is generally much more profitable than the iPad. Secondly, Apple tends to sell far more of these higher-margin devices.
With this background in mind, I think that some recent rumors/leaks around the upcoming 9.7-inch iPad Pro (as well as the lower-cost iPhone SE) offer some insight into what Apple plans to bring to the table with the iPhone 7.
New iPad and cheaper iPhone to use 12-megapixel rear camera sensor
According to 9to5Mac's Mark Gurman, a generally reliable source for Apple leaks, the upcoming 9.7-inch iPad Pro (the heir apparent to the iPad Air 2) will see an upgrade from an 8-megapixel rear camera sensor to a 12-megapixel camera sensor.
In all likelihood, this sensor will be the same one that was introduced in the iPhone 6s/6s Plus.
Separately, the upcoming iPhone SE -- a 4-inch smartphone with many of the same internals as the iPhone 6s -- is also expected to use this 12-megapixel camera sensor, per the highly reliable KGI Securities analyst, Ming-Chi Kuo.
What does this tell us about the iPhone 7?
If Apple is putting the current iPhone 6s/6s Plus camera sensor into a relatively low-cost 4-inch iPhone and an iPad, then this strongly suggests that Apple is planning a substantial camera performance upgrade with the iPhone 7/7 Plus.
Indeed, given that the camera is arguably one of the biggest selling points of a premium smartphone, it only makes sense for Apple to try to put as much distance between the prior generation phones and the iPad as possible with the new iPhones.
After seeing what Samsung (NASDAQOTH:SSNLF) brought to the table with the Galaxy S7 camera, which features excellent low-light performance and extremely quick autofocus courtesy of a new Sony (NYSE:SNE) IMX260 camera sensor, I suspect that we will see similar enhancements with the iPhone 7 camera.
In particular, I expect Apple to keep a similar 12-megapixel sensor, but enlarge the pixels, make every pixel in the sensor a "focus pixel" (as on the IMX260), and dramatically widen the aperture from f/2.2 to something closer to the f/1.7 on the S7.
Where things will get tricky for Apple's engineering team is pulling this off in a phone that's just 6.1-millimeters thin if the rumors are to be believed. Indeed, the Galaxy S7 is a 7.9 millimeters thick, more than enough to accommodate the camera module which Chipworks says is 5.4 millimeters thick. Apple will need to be able to achieve similar performance with a much thinner camera module.
The camera should be a nice selling point for the iPhone 7
The camera improvements that Apple brought to the table with the iPhone 6s/6s Plus were fairly disappointing, with the major improvement being a move to a higher resolution sensor. However, it would seem that with the iPhone 7/7 Plus, Apple will be making a bigger leap in camera performance. The iPhone Pro, which is rumored to feature a dual-lens setup, should be an even more exciting leap forward for the iPhone camera.
Although the new camera won't be enough of a feature on its own to drive a big iPhone 7 upgrade cycle, it should prove to be a critical ingredient of a compelling enough device to drive robust upgrade activity.