While there have been numerous claims that Apple's (NASDAQ:AAPL) sapphire crystal plant for building displays, operated by GT Advanced (NASDAQOTH:GTATQ), wouldn't be able to provide the production capacity for both rumored versions of the iPhone 6 in fiscal 2015, one analyst now suggests the storyline is shifting. In fact, his new predictions insinuate that Apple could be planning for a blockbuster year.
Not just any analyst
Matt Margolis, who is often found writing on Seeking Alpha, isn't your average Apple analyst. Going by the Twitter handle @sapphirecover24, his 11 articles on Seeking Alpha mostly cover Apple's partnership with GT Advanced for manufacturing sapphire crystal displays. The majority of his analysis on the matter ends up highly cited across the web. His in-depth analysis on GT Advanced Technologies' partnership with Apple is arguably among the best.
In February, Margolis projected GT Advanced was readying the equipment for a yield of 100 to 200 million smartphone displays that would fit the 4.7- to 5.5-inch range of the two alleged iPhone 6 models Apple is working on.
At 100 million units, however, Apple could have end up having too little supply for the iPhone. Sure enough, the reliable Apple analyst from KGI Securities, Ming-Chi Kuo, soon reported Apple would be forced to only use the sapphire crystal in the larger of the two iPhone models.
But Margolis has shifted gears on his predictions. Apple and GT Advanced may be ready to ramp up production capacity to handle both iPhone models and the iWatch, he predicts.
As a result of my most recent supply chain check I believe that the Mesa sapphire operations will have ample supply to cover the iWatch, the 4.7" iPhone and the 5.5" iPhone with full sapphire cover glass in 2014. Additionally, the maximum sapphire screen capacity of the Mesa facility is likely to exceed 200m annual units.
Another sign of optimism from Apple?
While Margolis' prediction may certainly have implications for GT Advanced investors, it also offers Apple investors another sign that management has an optimistic outlook for fiscal 2015. Possibly planning for 200 million plus combined iPhones and iWatch devices suggests the company could be expecting a big year.
To understand how big an expectation for 200 million devices is, consider that Apple sold just about 160 million iPhone units in the past 12 months -- some of which, of course, were not the flagship model.
If Apple pushes GT Advanced toward maximum capacity with its latest-generation iPhone models and the iWatch, Apple could be in for a great year. Perhaps Apple executive Eddy Cue was serious when he said at the Code Conference last month that, later this year, Apple has its best product pipeline in 25 years.