Here's 1 Way To Profit From Apple’s iPhone 6

This potential Apple supplier looks all set to benefit from the upcoming iPhone 6.

Apr 7, 2014 at 2:00PM

Apple's (NASDAQ:AAPL) next iPhone could be a blockbuster. The addition of new features, deal with China Mobile, and a bigger screen will make the iPhone 6 Apple's best phone, and this fact will ultimately be reflected in Apple's sales numbers going forward. The success of the iPhone 6 will not only benefit Apple, but will send ripples through the shares of all iPhone suppliers. However, the company that is in the spotlight is GT Advanced Technologies (NASDAQOTH:GTATQ), which is ironic since it is not an Apple supplier, yet.

A strategic deal
In November 2013, GT Advanced Technologies signed a $578 million deal with Apple, under which it was asked to install and operate the world's largest sapphire-crystal manufacturing plant. Ever since this deal was announced, GT Advanced Technologies has witnessed a run up of over 125% in its stock price.

Apple has not promised to buy any of the GT Advanced Technologies-produced sapphire crystals, and a failure to land a spot in the iPhone 6 can send the share price crashing down. However, GT Advanced Technologies investors shouldn't be worried as the company's long-term prospects look bright.

Although Apple hasn't confirmed that it will be using sapphire in its upcoming iPhone, many reputed sources are confident that it will happen. Both Forbes and Canaccord are speculating that the iPhone 6 will indeed come with a sapphire display.

The switch to sapphire is looking certain as Apple recently filed a patent application regarding oleophobic coating on sapphire. In simpler terms, oleophobic means oil repellent and the patent filing explains in depth how Apple plans to coat the sapphire display so as to reduce smudges on a sapphire screen. Oil affinity is one of sapphire displays' three big shortcomings, the other two being heavier weight and higher price than glass displays. However, it seems like Apple has overcome these limitations through innovation.

Based on one of Apple's 2013 patent filings, it seems that the Cupertino-based giant has tackled the price and weight problem by a technique which entails fusing a thin sapphire laminate sheet with cover glass. The infusion of glass will automatically bring down the cost and weight of sapphire displays and may even increase its shattering threshold.

Moving on, the event which further confirms the use of sapphire in the iPhone 6 is the blistering attack on the potential of sapphire display by Tony Tripeny, Corning's (NYSE:GLW) senior VP. Here's what Tripeny said:

We see a lot of disadvantages of Sapphire versus Gorilla Glass. It's about 10 times more expensive. It's about 1.6 times heavier. It's environmentally unfriendly. It takes about 100 times more energy to generate a Sapphire crystal than it does glass. It transmits less light which...means either dimmer devices or shorter battery life. It continues to break. I think while it's a scratch resistant product it still breaks and our testing says that Gorilla Glass [can take] about 2.5 times more pressure that it can take...Sapphire on. So when we look at it, we think from an overall industry and trend that is not attractive in consumer electronics.

However, Tripney's argument looks hazy. Tripney launched an all out attack on the properties of sapphire, but Apple will be using sapphire fused with glass, which refute many of Tripney's statements. In addition, sapphire display costs are coming down. Sapphire screen used to cost $30 per smartphone, but GT Advanced Technologies recently claimed that the cost has come down to $12 a piece and may further fall to $10 with technological advancements. Moreover, due to Apple's economy of scale, sapphire displays will not be as expensive as Tripney claims.

Thus, GT Advanced looks all set to profit from Apple's upcoming iPhone. The company has brought down the cost of sapphire displays and there's potential for further decreases. Moreover, Apple is now thinking of expanding its sapphire production facility to increase yields. This increases the chances of GT landing a spot in the next iPhone stronger and could push the company's shares to new highs once the news comes true.

More supplier picks: The biggest thing to come out of Silicon Valley in years
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Amit Patel has no position in any stocks mentioned. The Motley Fool recommends Apple and Corning. The Motley Fool owns shares of Apple and Corning. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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