Why Apple, Inc.'s iPhone 6 Won't Feature a Sapphire Display

It's OK, Corning (NYSE: GLW  ) investors; your Gorilla Glass should be safe for now. 

At least, that's what the Fool's Steve Symington argues in the video below, even as rumors swirl saying Apple's (NASDAQ: AAPL  ) iPhone 6 could feature a sapphire display and/or back panel when it's released later this year. But why?

First, Steve notes many recent headlines surrounding the topic are misleading, notably including those that refer to concept designs "based on leaked schematics" as their premise for confirming sapphire's extended role in Apple's iPhone 6.

In addition, he says investors should keep in mind that when sapphire supplier GT Advanced Technologies (NASDAQ: GTAT  ) announced its deal with Apple in November, the terms were clear: While the agreement does require GTAT to maintain a minimum level of capacity, it does not guarantee production volumes.

Finally, GT Advanced Technologies also confirmed in late February it was still building out its new production facility in Arizona. This means GTAT would likely be hard-pressed to fill the massive quantities required to meet Apple's iPhone 6 demands, especially if the iPhone 6's rumored launch this Fall proves accurate.

To hear Steve's full take on what this means for investors in Apple, Corning, and GT Advanced Technologies, please watch the video below.

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Read/Post Comments (22) | Recommend This Article (6)

Comments from our Foolish Readers

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  • Report this Comment On April 03, 2014, at 7:07 PM, Chiam wrote:

    Ridiculous article .. maybe that is why i am the only posting here. NO one like Motley!

  • Report this Comment On April 03, 2014, at 8:16 PM, SapphireScreen wrote:

    This article has such outdated information. Steve you haven't done any research on some of the current findings that have been presented by the outside media. You obviously didn't listen to the Conference calls or the recent Technology update meeting. You already wrote an article about this some weeks prior. Why produce a video to restate outdated information? It seems you have an ulterior motive of pumping Corning's stock price. Shameful!!!

    Motley Fool has lost my subscription for such horrible reporting and irresponsible tactics.

  • Report this Comment On April 03, 2014, at 8:38 PM, tvorfa wrote:

    Steve, the day traders and shorts are upset about the truth. It threatens their livelihood, and makes them VERY nervous. Both of whom are probably on their way to chewing their finger nails down to the bone, before Fridays open! You're spot on with your analysis. My wife works for Corning, and I stay on top of the markets everyday, especially since this sapphire glass collaboration with Apple was announced. I've scoured the internet everyday since, to get accurate, and plausible information. What you said, is EXACTLY what the real truth is. I could not have said it ANY better!

  • Report this Comment On April 03, 2014, at 9:40 PM, truthtrumpsfacts wrote:

    The point of this article would have more of a chance except for the truth that GLW at every chance they get, have been bashing sapphire. That is indirectly bashing AAPL's management and TC. "sapphire no good, you AAPL are clueless". Um.....sorry Steve. It is fact that we do not know yet if sapphire will be in Iphone6 but the truth is AAPL will go sapphire with some product(s) this year and then plenty of their products in the future.

  • Report this Comment On April 03, 2014, at 11:28 PM, lagunab1 wrote:

    Finally someone who tells the truth! Apple spent $600M with GTAT to make jewelry! YES! Not screen covers...Apple is introducing iJewelry this fall! It was a 600MILLION dollar ruse along with patents to support an iPhone screen! Yes, GLW stockholders have NOTHING to worry about, the managment has it all figured out which is why they took Korean Samsung 7% investment just to piss in the face of APPLE because they knew that Apple will always come back to gorilla glass.

  • Report this Comment On April 04, 2014, at 10:40 AM, TMFSymington wrote:

    @SapphireScreen, To which "conference calls" and "recent Technology update meeting" are you referring? I listen to/read every conference call I can find, and am happy to dig in and see if there's something I'm missing. And certainly not pumping Corning's stock price, just simply don't think Apple will ditch Gorilla Glass just yet in the iPhone 6.

    @tvorfa, Thanks for the kind words.

    @truthtrumpsfacts, Actually, you're more closely aligned with my thoughts than you might think -- listen to my comments at 1:53 on the potential for GTAT's sapphire to broaden its scope. Also, notice that nowhere do I say sapphire won't find its way into Apple products soon. I'm just not convinced the time frames line up perfectly for its inclusion in the iPhone 6. In any case, I'm looking forward to knowing more when Apple's WWDC kicks off on June 2!

    @lagunab1, Once again, remember GTAT has to repay that $578 million to Apple over 5 years beginning 2015. See here: http://www.fool.com/investing/general/2014/03/28/forget-sapp...

    Thanks for watching and Fool on!

    Steve

  • Report this Comment On April 04, 2014, at 10:55 AM, TMFSymington wrote:

    @SapphireScreen, Check that, you're referring to the technology briefing on March 14, right? Some good info on GTAT's improved sapphire manuf. solution in Hyperion, with the first orders expected for their latest machines later this year and initial shipments expected in 2015.

    Cheers,

    Steve

  • Report this Comment On April 04, 2014, at 12:43 PM, truthtrumpsfacts wrote:

    Steve, the difference is the "WILL NOT". I am not convince of that. The truth is we do not know. There might be 2 versions of iphone6 where one would have sapphire as a limited edition. My take is there is a pretty good chance that iphone6 will have sapphire than not because of GLW's management bashing of sapphire. If you were in business, would you call one of your biggest customers "clueless"?

  • Report this Comment On April 04, 2014, at 1:02 PM, petey48 wrote:

    Steve, quoting Steve as a source. No wonder this is outdated. Apple has been busy patenting a whole new manufacturing process for making Sapphire, including heat batteries and continuous flow to reduce manufacturing costs.

    Here is a link to an article that details what is probably the process that is going into Arizona. The article states that all analyst prognostications about Apple and sapphire are stuck using 1700 technology. What Apple is creating is 2000 technology, which has never been used before for sapphire. Costs are going way down and production is going way up. If I were Corning I would be very, very worried.

    http://margolismatt.com/2014/04/04/apples-new-heat-exchanger...

  • Report this Comment On April 04, 2014, at 1:19 PM, TMFSymington wrote:

    @petey48, I'm not arguing what Apple has planned for sapphire down the road given its recent patent applications and manufacturing advances. But, as I suggest in the video and given the fact Apple's iPhone 6 specs are almost certainly set in stone now (or will be soon given its design freeze set for this month), the real question remains of whether those technologies can be guaranteed to full ramp production by the iPhone 6's presumed Fall launch.

    I'm still not convinced that's the case, but more likely that Apple will begin expanding sapphires' scope with the iWatch near the end of this year.

  • Report this Comment On April 04, 2014, at 3:33 PM, truthtrumpsfacts wrote:

    Steve, so you saying that AAPL has a sufficient current inventory of GG that they can use with the iphone6 and does not need to order more GG from GLW? or that AAPL is and will be ordering now and in the future GG for the iphone6 if needed?

    seriously?...............

  • Report this Comment On April 04, 2014, at 3:56 PM, TMFSymington wrote:

    ^^ @truthtrumpsfacts, Not sure what you're arguing there, because either way it doesn't matter. GLW's GG production volume capabilities aren't what I'm questioning. The exact timing of the ramp of GTAT's sapphire volume is.

    However, in your previous comment you do bring up a good point -- that it's possible there could be two versions with sapphire as a limited feature. We'll see in a couple months, right?

    Cheers,

    Steve

  • Report this Comment On April 04, 2014, at 7:10 PM, Charismatron wrote:

    Motley article?

    Unsubstantiated click bait, every time.

  • Report this Comment On April 05, 2014, at 12:24 AM, truthtrumpsfacts wrote:

    Steve, if iphone6 is not going to be sapphire then it has to be GG! So do you really expect AAPL to buy GG from GLW for iphone6 with the constant bashing of AAPL/sapphire by GLW and the GLW/Samsung deal? IMO, the odds of that is pretty slim bordering on none. That is my argument. Hope that is clear as glass or is it sapphire?

  • Report this Comment On April 05, 2014, at 6:48 PM, tvorfa wrote:

    Steve, I was wrong about one thing I said, in that the shorts would be upset on Friday.....I meant the longs. You have to read the article that came out for GTAT today! What a crock! "600-800 million in revenue this year, with 80% from sapphire". Can you believe it? And by the way, in the last couple of months, the coverage given GTAT by social media sites and brokers, is like NOTHING I've EVER seen! It's UNBELIEVABLE! I also can't UNDERSTAND some of the comments you recieved....they don't make SENSE! I know that this is a free country, and everyone has the right to make sense or nonsense, and invest based on either, but COME ON! Keep it REAL Steve. Kyle

  • Report this Comment On April 05, 2014, at 10:42 PM, truthtrumpsfacts wrote:

    @tvorfa, why don't you answer my question to Steve, since he got somewhat tongue-tied.

  • Report this Comment On April 05, 2014, at 11:09 PM, TMFSymington wrote:

    @tvorfa, ^^ To be fair, the $600-$800 million w/80% from sapphire was the the guidance GTAT itself provided when it signed the deal with Apple last November. (read my article here for updated details: http://www.fool.com/investing/general/2014/02/24/why-gt-adva... )

    To your end, keep in mind that may be mostly Apple, but not all of it is...incluedes a combination of other sapphire sales as well (LED, specialty applications, etc.). However, as I suggested in the video, this could also be the result of a combination of increased demand not necessarily from an iPhone cover, but from another, yet-to-be-announced product like an iWatch. Again, doesn't have to harm Corning in the process.

    In any case, I agree; it pays to keep a level head and not get too carried away amid all the craziness. Over the long-term, both companies will be fine. Thanks Kyle.

    Cheers,

    Steve (@TMFSymington)

  • Report this Comment On April 06, 2014, at 10:25 AM, tvorfa wrote:

    Steve and everybody, if GTATs revenue estimates come to fruition this year, and going forward, perhaps the stock is even "cheap" now, I don't know. Just to be fair. Kyle

  • Report this Comment On April 06, 2014, at 10:46 AM, tvorfa wrote:

    Truthtrumpsfacts, no company wants to lose ANY source of revenue. That being said....I think GLW has come out so aggressively against sapphire, and for GG, because they REALLY believe the newest form of GG IS a better product, at a much better price, than sapphire. GLW has shown videos of the excellent scratch resistance, and improved strength against breaking of the newest form of GG. I was very impressed with the videos. I don't think GLW meant to attack sapphire, but to just show GG customers, that their newest form of GG is an excellent product at an great price. Kyle

  • Report this Comment On April 06, 2014, at 10:47 AM, TMFSymington wrote:

    ^^Hey Kyle, For perspective on its expected future figures, here's how I concluded the article I linked above from late Feb.:

    "Finally, keep in mind GTAT also told investors in November they expect 2015 sales will exceed $1 billion, and that 2016 sales could "nearly double from 2014 levels. Given today's 2014 range, this means possible 2016 sales of $1.2 billion to $1.6 billion, which GTAT thinks could drive adjusted earnings to over $1 per share.

    If that's true, with shares of GTAT currently trading below $14 per share, I think the stock could still prove a bargain for patient investors going forward."

    Now they're trading at $16.90 per share, still not terribly expensive.

    FWIW,

    Steve (@TMFSymington)

  • Report this Comment On April 06, 2014, at 4:05 PM, Sampat01 wrote:

    With all due respect, I think Steve Symington is wrong here. What he is essentially arguing is that when you put 2 and 2 together it is not necessarily equal to 4. This article provides no logic, no facts or analysis & no insights to support his assertion, that would make readers agree or even understand. Certainly not worth the space Motley Fool is affording it. Disappointing.

  • Report this Comment On April 06, 2014, at 4:06 PM, truthtrumpsfacts wrote:

    Steve, I understand GLW's Situation but the consumer will decide the outcome. But you still seem not to get my argument. Your article's opinion is that iphone6 will be GG. My take is TC/aapl will not take kindly to the aggressive action that GLW took on sapphire and will not be buying any GG for the iphone6. IMO, GLW's action tells me that there are no GG for iphone6, therefore imo iphone6 will be sapphire

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