It's for a "secret project," Apple (NASDAQ:AAPL) CEO Tim Cook said during the question-and-answer session with Apple shareholders last week when asked about the purpose of its new sapphire production facility. With Cook promising "new categories" this year, there is a chance investors won't have to wait long to see exactly what Apple will be building in the facility. While speculating the factory's purpose is fun, the big takeaway for investors here is Apple's efforts to improve secrecy may be beginning to pay off.
The plant and its purpose
The Arizona plant, owned by Apple and operated by GT Advanced Technologies, is a sapphire crystal glass factory. Previous reports that Apple has contracted enough crystal growing capacity to make up to 25 million smartphone covers a quarter suggest that the Apple may be planning to eventually replace Corning, which supplies Apple with its Gorilla Glass. But then a February report from Asian supply chain sources said that Apple will not be using the sapphire glass in this year's iPhone lineup and that the factory will be used for Apple's iWatch.
In Apple's annual shareholders meeting Cook said that the plant will be working on "extensions of what we're already doing" and also "things you can't see." These comments support the idea that Apple may be working on both on an eventual launch for both a new iPhone and an iWatch.
Finally doubling down on secrecy
Considering that Apple has promised new categories this year, it's surprising so little is known about Apple's launch plans for these products. Given the company's expansive global supply chain and an incredibly active rumor mill, part and product leaks are basically inevitable. Cook did say in 2012 at the All Things Digital D10 conference that it will be taking secrecy to another level: "We're going to double down on secrecy on products. I'm serious." Apparently Cook was, indeed, serious.
Investors should be happy with Apple's seemingly higher levels of secrecy on future products. As Cook recently reminded shareholders, Apple is "getting ripped off left, right, and sideways." Talking about its future product plans, he explained, would give competitors a road map of Apple's plans. Further, "We think the element of surprise is important," Cook emphasized.
While there are certainly iWatch rumors and rumors of iPhones in the pipeline with larger displays, there are no major product leaks for either product line, both of which are speculated to launch this year. While it would be fun to have better insight in to Apple's product plans for 2014, it's better that Apple shareholders are left in the dark.
Cook is right: The element of surprise is important -- probably more important than ever.