While a recent article from The New York Times has the blogosphere aflutter with speculation about new devices from Apple (AAPL +0.17%) that will employ new flexible glass technology from Corning (GLW 7.54%), there seems to be a distinct misunderstanding of where the technology is going. Willow Glass, the new product from the makers of Gorilla Glass, is absolutely a critical advance. Unfortunately for Apple, however, and to the benefit of both Samsung and Google, the technology is but a small part of the story that can easily be misunderstood and morphed into something it is not. Without meaning to suggest that the story, or the reporting that it has spawned, is intentionally misleading, the winners of this race seem to be Samsung and Corning.
iWatch morphs
At the core of the story is the news that Cupertino may be working on a new device in the wristwatch form factor. The device will apparently utilize the new curved glass technology available from Corning. The Times Nick Bilton goes on to explain: "Last year, Corning, the maker of the ultra-tough Gorilla Glass that is used in the iPhone, announced that it had solved the difficult engineering challenge of creating bendable glass, called Willow Glass, that can flop as easily as a piece of paper in the wind without breaking."
Where the story seems to take a massive leap forward is when Bilton shares that two people close to the story said that the new Apple device will "stand apart from competitors based on the company's understanding of how such glass can curve around the human body." When this is combined with the explanation provided by Corning Glass Technologies' Chief Technology Officer Pete Bocko that Willow Glass could be used to wrap around a human wrist, the implication is that Apple is in the process of developing a flexible device.
Flexible glass is not the same as a flexible device
A careful reading of the Willow Glass webpage reveals that the products "will support thinner backplanes and color filters for both Organic Light Emitting Diodes (OLED) and liquid crystal displays (LCD) in high performance, portable devices such as smart phones, tablets, and notebook computers." What does this mean? The glass, which is a major technological advance in its own right, is exactly what it sounds like: a piece of glass. Unless it is laid over something, it is nothing more than a protective layer wrapped around something else.
The application of Willow Glass in a watch makes sense if the face and guts of the watch do not need to bend and move. The implication of the story, however, seems to be that the underlying product will be flexible as well. Essentially, the ability to wrap the glass around the human body is of almost no meaning for the development of a flexible device, unless what is underneath can bend as well.
Enter Youm
Here is where the bad news for Apple begins. At this year's Consumer Electronics Show, Sumsung introduced flexible OLED technology that was dubbed Youm. The product was exhibited on a Windows phone. The inclusion of Microsoft (MSFT 1.40%) led to a significant amount of speculation that Samsung's first release of Youm will be with Microsoft and not on a Google Android smartphone. While other companies -- perhaps Apple -- are working on OLED technology, Samsung is believed to be well ahead of its competitors. Even if a Windows phone is the first to receive an OLED display, there is further speculation that the Galaxy S IV -- a revamp of the popular Galaxy S III -- will also receive this type of display.
The language offered by Corning seems to make clear that the glass is designed to be used over OLED technology. While Apple is a Corning customer, there is no exclusive relationship between the companies. Where things get less rosy for Apple, and more confusing, is in the fact that Samsung is believed to control roughly 90% of the OLED market. While Samsung could certainly accept Apple as a customer for its OLED business, it would seem that with a product that is potentially this advanced, selling to the company's top rival unlikely.
Sorting it all out
If you are confused, I think you are likely in good company. To simplify, the implication of the Bilton article in the Times is that as a result of the perfection of Willow Glass, Apple will now be able to manufacture bendable devices that will foster its efforts in wearable computing, specifically in the wristwatch form factor. In reality, Corning's Willow Glass alone is not enough to create a flexible device -- the underlying OLED or other display technology must also be flexible. While no hard data is available, Samsung is believed to control this market. The logical conclusion is that Samsung and not Apple is poised to push the envelope and introduce a new wave of wearable or flexible products.
While the news is great for Corning -- its product will likely be a necessary element -- Samsung is also in good shape, as is Google, which provides Android to many top-selling Samsung smartphones. Unfortunately, Apple looks like the big loser of the group, unless Samsung inexplicitly sells OLEDs to its main competitor from Cupertino or it solves the issues by itself. In any event, Corning looks like a buy on the news, with Google waiting on a big catalyst to come out of the story.
