Ignore This Apple Inc. Rumor

Apple  (NASDAQ: AAPL  ) is widely expected to incorporate sapphire into its devices to an even greater extent in the future. However, a new report from China suggests that sapphire will be prohibitively expensive for even Apple to use. The report, which is admittedly questionable, pegs sapphire display assembly costs at $280. That's up from the current estimated cost of around $40 for Retina display assemblies. Such a major spike in component costs would inevitably end up pushing up retail prices if the report proves accurate -- but the numbers simply don't add up.

Corning has worked hard to show that its Gorilla Glass remains superior, as Corning would stand to lose if Apple shifted to sapphire. GT Advanced Technology has started to ship sapphire in small quantities to Apple from its Arizona facility. GT Advanced has built a factory with such massive capacity that the company could help push down sapphire prices across the board.

In this segment of Tech Teardown, Erin Kennedy discusses sapphire costs with Evan Niu, CFA, our tech and telecom bureau chief.

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  • Report this Comment On May 07, 2014, at 5:48 AM, tyler91988 wrote:

    AAPL would be foolish to ditch Corning this way. Steve himself said "We couldn't have done it without you" (regarding the iPhone) to Corning's CEO.

    Either way, GTAT is rising on the rumors. GLW should remain a strong bet.

    Long AAPL, GLW, and GTAT.

  • Report this Comment On May 07, 2014, at 7:32 AM, jdmeck wrote:

    And Corning could not have done it without Steve. He is the one who had them pull the concept out of the trash.

  • Report this Comment On May 14, 2014, at 4:59 PM, izeldor wrote:

    There may be a challenge on the patents for Sapphire from a Swiss developer. Such litigations can take years and not change the existing playing field, except possibly to sour the proverbial milk. I am unfamiliar with the process for Gorilla glass but sapphire can be very expensive for a few reasons, including 'loss-yield'. It does not matter how large the production facility is when it comes to costs of spoliation.

    The ultimate winner of this game will probably be the one that devises methods to reduce the power consumption of touch-screens. If the material is scratch and break resistant, even better but ultimately secondary in value to the end consumer. If a breakable glass can run 5-6 days and be significantly cheaper versus an impact resistant one that runs 2-3 days, people will be kicking their 2-3 day 'smart-phone' down the street.

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