The stock was rising 0.4% to $199.96.
The lidar sensor would provide a three-dimensional view of the road. Apple's desire to co-make this hardware is part of its agenda to get exposed to the potentially explosive self-driving car market, an agenda the company calls "Project Titan."
Apple may be able to make the sensor itself, but may prefer to buy some or all of the part from another supplier as that could be less expensive and more efficiently produced that current technology, Reuters noted.
Lidar systems currently use laser impulses to capture images around the car but can cost $100,000. They can be bulky and problematic during the production process, according to Reuters. An aggregate of $1 billion has been invested across several companies to produce a lidar system cheaper and more manageable.
Apple shares have risen about 27% this year.