Corning (GLW 7.46%) is more tied to the HDTV market than it is to the booming smartphone and tablet market. That's because its third-quarter HDTV display net profit made up 82% of its total profit, which also declined 26% on a year-over-year basis. The reason why Gorilla Glass has become a hot topic among investors is because it was Corning's only business segment to report year-over-year growth in income last quarter . Naturally, Corning has focused on growing this specialty materials segment to drive more profitability going forward.
Gorilla Glass 3
Gorilla Glass 3 improves upon previous generations of Gorilla Glass by offering three times more scratch resistance and 40% overall fewer visible scratches. As a whole, the Gorilla Glass Empire has grown to more than 1 billion devices from more than 33 brands. It's especially useful for touch-enabled devices, which can better stand up to the rigors of use thanks to such products as Gorilla Glass. Since Gorilla Glass 3 significantly improves upon version 2.0, it's likely that Corning will be able to justify a higher premium over predecessors. This should make Gorilla Glass 3 a future driver of profit growth for Corning come mid-2013 when it becomes available .
New area of focus
Signage has become a new area of focus for Gorilla Glass. At CES in Las Vegas, Corning partnered with Christie Digital Systems to showcase Christie's 55-inch LCD flat-panel display suited for creating video display walls with multitouch technology. Intended for commercial applications, the durability of Gorilla Glass makes it an ideal choice for traveling exhibits or public displays. NPD estimates this market will grow from 3.1 million units shipped annually to 12 million units by 2018.
Thanks, Intel!
At CES, Intel (INTC 6.53%) unveiled the specifications for its next-gen Ultrabooks, requiring OEMs to include touch displays. Currently, Corning's Gorilla Glass is only used by four PC manufacturers. Considering Intel has nearly 140 Ultrabooks on the market, this is likely another potential catalyst for Corning to sell more Gorilla Glass.
Not sitting idle
Corning isn't sitting idly and waiting for the HDTV market to rebound. It's working to drive profitability in new areas thanks to innovations such as Gorilla Glass. As much as I commend management to drive these initiatives, investors still need to recognize that unless the HDTV market rebounds or Corning can pull off some incredible growth in its specialty materials segment, shares are likely to stagnate for the time being.
