There's been talk this year that the next big thing in smartphones would be the adoption of sapphire displays. It all started in March, when MIT Technology Review published a report on the material, suggesting that the material's strength could represent a threat to Corning (GLW +5.21%) Gorilla Glass. All the signs of a disruptive threat remain, except the cost differential remains large enough that Corning should be safe for now.
Apple (AAPL +1.39%) is largely credited with sparking Gorilla Glass adoption after it found a new use for the decades-old material in the iPhone. The iPhone maker currently uses sapphire in the latest iPhone 5, except only as a small camera lens cover. Apple is one of the few high-end OEMs that could potentially be willing to pay up for sapphire cover glass to further differentiate the iPhone from the competition. That could potentially spark another shift, except this time, away from Gorilla Glass.
Speaking of high-end OEMs, Vertu CEO Perry Oosting shines some light on the state of sapphire smartphones. The maker of diamond-encrusted smartphones is about as high end as it gets, and has experience putting sapphire (and other precious gems) all over smartphones. In a recent interview with German site Tages-Anzeiger, Oosting mentions that Apple had previously hired away several Vertu employees to investigate using sapphire displays.
However, sapphire requires a lot of processing time for production, which makes it difficult to meet Apple's volume needs that easily reach 30 million to 40 million units per quarter. That's one reason why Apple has shelved the idea for the time being and will stick with Gorilla Glass for the foreseeable future.
Nokia used to own Vertu, but sold off the majority of the company to private equity firm EQT VI last year, while retaining a 10% minority stake.
Corning has also proactively responded to the threat, and has released internal tests that show Gorilla Glass holding up better than sapphire. That's why the glass maker isn't scared of sapphire quite yet, and can enjoy its latest cash cow for a little while longer.
