Apple's next-generation flagship device iPhone 6 could incorporate some camera improvements, while retaining the existing 8-megapixel camera sensor.

It is reported that the iPhone's camera module supplier Largan Precision's stock suffered a significant drop on Wednesday as investors reacted to speculation that the upcoming smartphone will continue to use an 8-megapixel sensor, not upgrading to a higher-resolution sensor in the 12 megapixel-16 megapixel range.

However, the source also stated that the iPhone 6's rear camera could feature enhanced optical image stabilization, which is expected to reduce blurring associated with the motion of a camera during exposure.

"Largan's recently lagging performance in the market is caused by rumors that Apple may adopt an 8 mega-pixel (MP) camera with improved optical image stabilization on its upcoming handset, instead of the 16 MP upgrade anticipated by industry observers," said Nomura Securities. "Apple's decision is based on the design requirement to retain the handset's more portable form factor."

"Largan retains a leading edge among competing suppliers, as even though the camera's pixel count remains the same, the company is among the few companies capable of coping with the complexity of the camera module," Nomura Securities added. "The production of smaller-factored camera modules would require significantly improved optical aperture and resolution attributes, which are the company's competitive strengths."

The Cupertino-based tech giant first introduced an 8-megapixel rear camera in the iPhone 4S back in 2011, and incorporated similar camera modules for iPhone 5 in 2012 and iPhone 5c in 2013. Last year's flagship iPhone 5s model continued to feature an 8-megapixel sensor, but got several hardware and software enhancements, including increased pixel size, a larger aperture, and new "True Tone" duel LED flash.