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Here's Why I Might Be (Half) Wrong About Sapphire in Apple Inc.'s iPhone 6

Earlier this month, the Fool's Steve Symington made the case for why Apple's (NASDAQ: AAPL  )  iPhone 6 won't feature a sapphire display when it's released later this year.

But in the interest of truly Foolish investing, he's decided to take some time in the following video to highlight a recent analyst's report that indicates Steve might be wrong. Or at least half wrong, anyway. 

Specifically, Steve's talking about KGI Securities analyst Ming-Chi Kuo, who recently stepped out with a comprehensive report on Apple's plans for the remainder of 2014. More pertinent in this case, however, are Kuo's remarks on Apple's iPhone 6, in which he cites supply-chain sources who say Apple ultimately intends to switch completely from Corning's (NYSE: GLW  ) Gorilla Glass to GT Advanced Technologies' (NASDAQOTH: GTATQ  ) sapphire to cover future iPhones.

The catch? Even given the recent reported ramp at GT Advanced Technologies' new Mesa, AZ facility, Kuo suggests supply constraints may limit sapphire covers this year to only Apple's high-end iPhone 6 model. In short, while supply constraints were Steve's primary near-term concern, he hadn't accounted for the possibility that Apple might be willing to restrict sapphire's expanded role to just one higher-end device.

So what would this mean for investors in Apple, Corning, and GT Advanced Technologies? To hear Steve's full take, including what this says about GTAT's guaranteed capacity versus actual production volumes, please watch the following video.

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Read/Post Comments (5) | Recommend This Article (5)

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 22, 2014, at 2:50 PM, bwkoenig wrote:

    So Steve, now we have 3 reports with no facts. We have your first report, Kuo's report and now your 2nd report. Yet there are facts. Apple scrambled to get a portion GTAT's huge facility up an running by Feb with the entire plant running by May, with known orders for furnaces that could create millions of screens far exceeding even Iphone 6 sales projections. This would be for products released in 2015? Apple usually ramps up 60-75 days before release. They just decided to build a huge plant to make sapphire screens but won't actually make them until next year?

    Why not read the work some have done on the projected volume at GTAT's plant instead of requoting someone's erroneous work.

  • Report this Comment On April 22, 2014, at 4:41 PM, RussellL wrote:

    7th Apple article from The Motley Fool in 24 hours.

  • Report this Comment On April 22, 2014, at 4:49 PM, TMFSymington wrote:

    @bwkoenig, I've read the other work, but -- in your words -- we're still talking about "projected volume" and thousands of furnaces that "could" create millions of sapphire displays. This speaks to GTAT's own phrasing when it announced the Apple deal: "Although the agreement does not guarantee volumes, it does require GT to maintain a minimum level of capacity."

    That doesn't mean I can't be wrong, but it does mean we don't know for sure exactly what Apple's up to.


    Steve (TMFSymington)

  • Report this Comment On April 22, 2014, at 6:52 PM, GaryDMN wrote:

    Apple has been buying sapphire glass for a while, as they used some in the camera on the 5S, why couldn't they have been buying sapphire glass on the open market for months or even years, before producing any of their own? Their sapphire glass plant is already the world's largest and it's isn't totally scaled up yet. There is absolutely no reason why Apple couldn't be using sapphire glass in the iPhone 6 and tons of reasons they would.

  • Report this Comment On April 26, 2014, at 1:39 AM, lowmaple wrote:

    Tim Cook is well known for his supply acumen. The top line products also may differentiated by sapphire for marketing to set the price and margin higher. They certainly would not to ship some of a model without and so run short on sales.

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Steve Symington

Technology and consumer goods specialist for the Fool. Steve looks for responsible businesses which positively shape our lives. Then, he invests accordingly. Enjoy his work? Connect with him on Twitter & Facebook so you don't miss a thing.

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