A lot of attention and speculation has been brewing on GT Advanced Technologies' (GTAT) sapphire screens replacing Corning's (GLW) Gorilla Glass in the iPhone 6. Sapphire is one of the hardest materials on earth and is basically scratch proof, but it's extremely hard to mass produce and has seen limited use in today's products. However, Apple (AAPL) recently announced a multi-year, $578 million contract with GTAT to supply advanced sapphire materials. Apple also announced a patent to basically sandwich a chemically strengthened piece of glass between 2 sapphire screens in hopes of reducing costs. This is what caused the speculation of sapphire being used in the iPhone 6. I think this demise of Gorilla Glass is vastly overstated and Corning's success will continue for a number of reasons.
Limits of Sapphire
-Cost: A sapphire screen used in a phone today costs roughly $30, or 10x the cost of Gorilla Glass. Apple's investment in GT Advanced Technologies may bring down production costs, but it is unlikely to reduce costs by 1,000% to be competitive with Gorilla Glass.
-Clarity: Sapphire screens let through roughly 6% less light than Gorilla Glass, which leads to less clarity in the display.
-Fracture Strength: No one is arguing sapphire's clear advantage in scratch resistance, but its fracture strength is definitely up for debate. The hardness of sapphire doesn't necessarily translate to better shatter resistance. Corning released a video showing Gorilla Glass beating Sapphire in a shatter resistance test.
-Energy Cost: Gorilla Glass uses about one-hundredth as much energy to form as sapphire. Corning said, "If all the smartphones in the world used sapphire as a cover, we calculate that the incremental energy required would be the same as 2.6 million average U.S. households use annually, or 7.4 times as much energy as the Hoover Dam produces in a year."
-Mass Production: Currently sapphire is only being used as camera lens and thumb-print scanner covers on the iPhone 5S. Sapphire has also been used in high end watch covers and in a select few smartphone screens. Producing screens for potentially tens of millions of iPhones is a completely new ballgame. Ramping up production to this level in around a year for an iPhone 6 launch would be extremely difficult. I don't believe Apple would take the risk of having production issues just to use a far more expensive screen.
