Over the past few months, details have been slowly emerging about the mystery of why Apple (NASDAQ:AAPL) didn't use sapphire in the iPhone 6 and 6 Plus. Before the unveiling, there was intense speculation that Apple would use the material, but also some clues that perhaps it wouldn't.
GT Advanced Technology's October bankruptcy filing has been crucial to important details making their way to the public, including some of the hardball negotiating tactics that Apple utilized as well as new information on how asymmetrically structured the deal was to begin with.
The Wall Street Journal recently reported on even more details on the failed partnership after Apple permitted the publication to review a letter it sent to GT's other creditors. Simply put, GT was too new to actually manufacture sapphire material itself and it didn't have the time, money, or expertise to work out all the kinks.
Importantly, it now seems that Apple was intent to use sapphire in the iPhone 6 and 6 Plus, as GT was manufacturing pieces in the shape of the new models. That also explains why a handful of sapphire cover glass prototypes were leaked, which only intensified speculation.
As Apple's sapphire dreams hit a wall, will the iPhone maker go back to its tried-and-true supplier Corning (NYSE:GLW)?
Talk about good timing
Corning has just introduced Gorilla Glass 4, the latest version of its popular cover glass. The company says that Gorilla Glass 4 is twice as tough as any other cover glass on the market, while also providing twice the damage resistance. Corning focused very heavily on drop protection for this generation.
Scratch resistance and drop protection are the most important characteristics of a cover glass material, and sapphire's higher scratch resistance was one of the driving motivations for Apple to consider the material in the first place. However, sapphire is so brittle that it fares worse in the drop protection department. It's also heavier.
Corning conducted extensive field tests and learned that "the worst surfaces on which to drop your device are rough surfaces like asphalt and concrete." I may not be a scientist or glass engineer by trade, but I could have told you that without extensive field tests.
The iPhone 6 might already have Gorilla Glass 4
Despite the fact that Corning just announced Gorilla Glass 4, the iPhone 6 might even already sport the material. At a UBS tech conference earlier this week, Corning's CFO Jim Flaws said [emphasis added]:
Our Gorilla Glass business has seen volume growth versus last year. However, that's been offset by a large price decline in Q1. We are planning to launch Gorilla Glass 4 this week, in fact, tomorrow. And I can't spoil the launch, but it does promise to have dramatically improved performance characteristics, and our customers have already been integrating this glass into some new products, and we have been shipping for a while.
Meanwhile, Flaws said Gorilla Glass unit volumes in the fourth quarter are expected to fall modestly sequentially following "very high shipments of Gorilla Glass in Q3 for some well-known new product launches."
Corning enjoyed higher Gorilla Glass volumes last quarter, which helped it overcome the negative effects of the price decline. The Specialty Materials segment that includes Gorilla Glass results saw revenue jump 10%, and Corning said strength in the Gorilla Glass business primarily drove the 18% sequential increase in net income.
With Apple's sapphire plans up the in air, Gorilla Glass 4 will get the job done just fine.