Apple's Sapphire Factory May Hint at Big iPhone 6 Plans

"Big," of course, requires context. In Apple's (NASDAQ: AAPL  ) case, big is enormous -- even unprecedented in many cases. It's this sort of big that describes how things are looking in Arizona at Apple's new Sapphire factory in conjunction with GT Advanced Technologies (NASDAQOTH: GTATQ  ) .

If there were any doubts Apple's plans with Sapphire were conservative, there shouldn't be any today. A handful of construction companies are now apparently bidding on a potential expansion for the factory to boost output even further, according to AppleInsider.

Sapphire crystal?
For those that haven't been following the Apple rumor mill, the world's largest tech company took the Street by surprise when it announced last November that it was purchasing a vacant factory for a sapphire glass manufacturing plant in Arizona. While it's not certain that Apple plans to use the sapphire in iPhone displays, most speculation points to its potential use in the iPhone 6. There's also been speculation it will be used in Apple's rumored iWatch.

Apple uses sapphire glass to protect the camera in its iPhones and on the home button of the iPhone 5s for Touch ID.

Apple's main iPhone display supplier today is the same company it started with when it launched the iPhone in 2007: Corning, the maker of the durable and increasingly thinner Gorilla Glass. While sapphire glass is known for its superior resistance to scratches, Corning has argued several times that the cons for the crystalline form of aluminum oxide as a display outweigh the pros when compared to its Gorilla Glass.

Apparently, however, Apple and GT Advanced have confidence in the new technology for upcoming Apple products given the extent of the project. Matt Margolis, an analyst who follows sapphire technology closely, estimates that the factory's orders for equipment imply capacity for 100 to 200 million sapphire iPhone displays per year.

The expansion
But 100 to 200 million displays per year may only be the beginning. AppleInsider has said that it has confirmed with "people close to the project" that there is a proposed expansion that may boost production even further. It's becoming increasingly obvious that Apple has some pretty major plans for sapphire glass. In the past twelve months, Apple only sold about 153 million iPhones, so production plans for capacity beyond 100 to 200 million displays per year is relatively impressive. Is Apple planning to replace its reliance on Corning as a display supplier for iPhones entirely? Even more, is Apple planning to use sapphire glass in multiple product lines?

Even more, it looks like production has already begun in the factory. Though the plant is still under construction, Apple Insider author Mikey Campbell says "the plant is powered by a massive array of temporary generators and is already churning out product."

For Apple shareholders, these optimistic sapphire glass plans are a good sign. And even if the proposed expansion doesn't pan out, plans for the factory are already at the levels of current annual iPhone sales. With the combination of big investments in future production of new technology and continued aggressive share repurchases, it's clear Apple management doesn't project a bearish storyline for the demand for its products in the coming years.

The biggest thing to come out of Silicon Valley in years
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.

Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 05, 2014, at 4:20 PM, docdonovan wrote:

    By the way.. there is very strong speculation that Apple's WWDC logo is a solar module (the theory being integrated solar cells within sapphire displays). Take a look at a solar module and come to your own conclusion...

    AAPL and GTAT ! ;)

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2902681, ~/Articles/ArticleHandler.aspx, 9/2/2015 6:05:19 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Daniel Sparks

Daniel is a senior technology specialist at The Motley Fool. To get the inside scoop on his coverage of technology companies, follow him on Twitter.

Today's Market

updated Moments ago Sponsored by:
DOW 16,351.38 293.03 1.82%
S&P 500 1,948.86 35.01 1.83%
NASD 4,749.98 113.87 2.46%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/2/2015 4:00 PM
AAPL $112.34 Up +4.62 +4.29%
Apple CAPS Rating: ****
GLW $16.99 Up +0.29 +1.74%
Corning CAPS Rating: *****
GTATQ $0.23 Down +0.00 -1.09%
GT Advanced Techno… CAPS Rating: ***