If you've ever suffered the horror of shattering or scratching the cover glass on your smartphone, Corning Incorporated (NYSE:GLW) has some great news for you.
And no, Corning isn't suddenly getting into the sapphire cover business. In fact, quite the opposite: At Corning's 2015 annual investor meeting last week, the glass maker revealed it's working hard to render pure sapphire displays obsolete.
Meet "Project Phire"
According to Corning Glass Technologies president James Clappin, they've appropriately dubbed the effort "Project Phire." Clappin elaborated:
We told you last year that sapphire was great for scratch performance, but didn't fare well when dropped. So we created a product that offers the same superior damage resistance and drop performance as Gorilla Glass 4, with scratch resistance approaching sapphire. We will commercialize this extraordinary development later this year.
To be sure, just over a year ago, Corning stock was plunging after sapphire producer GT Advanced Technologies (NASDAQOTH: GTATQ) announced a multi-year agreement with Apple (NASDAQ:AAPL) to produce and supply the super hard material for the tech giant's then-unspecified iProducts. We now know sapphire was meant to at least cover two variations of the Apple Watch -- thanks in no small part to its superior scratch resistance -- but investors couldn't help but wonder whether sapphire posed a legitimate threat to Corning's widely used Gorilla Glass.
However, it became clear that wasn't the case when GT Advanced Technologies descended into bankruptcy late last year, hurt by the weight of the deal, which was structured heavily in Apple's favor. What's more, shortly after the iPhone 6 was announced without a sapphire display, an IDC analyst's channel checks revealed part of the reason for the material's absence was that sapphire-covered iPhones "repeatedly cracked during standard drop tests conducted by Apple suppliers." When given the choice of a device with superior scratch resistance, or one able to survive a catastrophic drop, it's no surprise Apple opted to stick with the latter.
Corning won't stop there
It's also unsurprising that Corning wouldn't be content to rest on its laurels and wait for another Gorilla Glass competitor to arrive. By offering the best of both worlds with whatever commercialized product comes out of Project Phire, Corning should be able to secure a virtual stranglehold on the cover glass industry going forward.
Of course, keep in mind Clappin also only said the Project Phire material has "scratch resistance approaching sapphire" (emphasis mine). This indicates it still doesn't quite match sapphire just yet on the scratch front, but it should suffice for most consumers knowing Corning is closing the gap between the two while still maintaining the superior drop-handling ability of Gorilla Glass 4.
What's more, keeping in mind Gorilla Glass 4 includes significant improvements over each of the prior three Gorilla Glass iterations, you can bet Corning will continue plowing R&D funds into further improving Project Phire going forward.
In the meantime, the Project Phire product will likely be released later this year as another variation of Gorilla Glass, especially given the impressive brand power that already comes with the primate-centric moniker. Clappin noted, for example, that one of Corning's leading Asian customers recently told them some Chinese speakers even believe "Gorilla" is the American word for glass.
Over the long term, that obviously bodes well for Corning's Specialty Materials segment, revenue from which is already expected to increase 10% year over year this quarter, driven by healthy demand and pricing power for Gorilla Glass 4. If Corning can indeed follow through on its promise to commercialize developments of Project Phire by the end of 2015, it should serve to only further sustain that momentum.