Apple's (NASDAQ:AAPL) next iPhone could be a blockbuster. The expansion of new features, bargain with China Mobile, and a greater screen will make the iPhone 6 Apple's best telephone, and this will eventually be reflected in Apple's sales numbers going ahead. The success of the iphone 6 won't just profit Apple, however will send ripples through the shares of all iphone suppliers. Be that as it may, the organization that is in the spotlight is GT Advanced Technologies (GTAT), which is unexpected since it is not an Apple supplier, yet.
A strategic arrangement
In November 2013, GT Advanced Technologies signed a $578 million arrangement with Apple, under which it was asked to install and work the world's largest sapphire-crystal assembling plant. Since the time that this arrangement was affirmed, GT Advanced Technologies has witnessed a run up of in excess of 125% in its stock cost.
- Warning! GuruFocus has detected 7 Warning Signs with AAPL. Click here to check it out.
- AAPL 15-Year Financial Data
- The intrinsic value of AAPL
- Peter Lynch Chart of AAPL
Apple has not promised to purchase any of the GT Advanced Technologies-created sapphire crystals, and a disappointment to land a spot in the iphone 6 can send the share value crashing down. Nonetheless, GT Advanced Technologies investors shouldn't be concerned as the organization's long haul prospects look splendid.
Despite the fact that Apple hasn't affirmed that it will be using sapphire in its approaching iphone, numerous rumored sources are certain that it will happen. Both Forbes and Canaccord are speculating that the iphone 6 will for sure accompany a sapphire display.
The switch to sapphire is looking sure as Apple as of late recorded a patent application with respect to oleophobic covering on sapphire. In simpler terms, oleophobic means oil repellent and the patent documenting explains in profundity how Apple plans to layer the sapphire display so as to diminish smudges on a sapphire screen. Oil natural inclination is one of sapphire displays' three major shortcomings, the other two being heavier weight and higher cost than glass displays. On the other hand, it seems like Apple has conquer these limitations through advancement.
Based on one of Apple's 2013 patent filings, it seems that the Cupertino-based goliath has handled the value and weight issue by a procedure which entails fusing a meager sapphire overlay sheet with spread glass. The infusion of glass will naturally cut down the cost and weight of sapphire displays and may even increase its shattering threshold.
Proceeding onward, the occasion which further confirms the use of sapphire in the iphone 6 is the blistering assault on the capability of sapphire display by Tony Tripeny, Corning's (NYSE:GLW) senior VP. This is what Tripeny said:
We see a great deal of disadvantages of Sapphire versus Gorilla Glass. It's about 10 times more expensive. It's something like 1.6 times heavier. It's ecologically threatening. It takes something like 100 times more vitality to produce a Sapphire crystal than it does glass. It transmits less light which...means either dimmer devices or shorter battery life. It continues to break. I think while its a scratch resistant item it still breaks and our testing says that Gorilla Glass [can take] something like 2.5 times more pressure that it can take...sapphire on. So when we take a gander at it, we think from a general industry and pattern that is not appealing in consumer electronics.
Notwithstanding, Tripney's contention looks cloudy. Tripney jump started a hard and fast assault on the properties of sapphire, however Apple will be using sapphire fused with glass, which invalidate a hefty portion of Tripney's statements. Moreover, sapphire display costs are descending. Sapphire screen used to cost $30 for every smartphone, except GT Advanced Technologies as of late guaranteed that the cost has descended to $12 a piece and may further tumble to $10 with mechanical advancements. Besides, because of Apple's economy of scale, sapphire displays won't be as expensive as Tripney claims.
Thus, GT Advanced looks all set to benefit from Apple's approaching iphone. The organization has cut down the cost of sapphire displays and there's potential for further decreases. Also, Apple is presently considering growing its sapphire generation office to increase yields. This increases the chances of GT arriving a spot in the following iphone stronger and could push the organization's shares to new highs once the news comes genuine.