I am almost certain that Apple's (AAPL, Financial) new iphone 6 will have a sapphire showcase. Notwithstanding, I additionally accept that Apple's approaching iwatch will likewise utilize GT Advanced Technologies' (GTAT, Financial) sapphire presentation. The late UBS downgrade claims that Apple won't have enough sapphire to fulfill the interest of the idevices; then again, I surmise that this assumption isn't right. We should investigate the reasons why I think the iwatch, along with the iphone 6, will have a sapphire presentation.
Expanding Production Capacity
Back in March, Appleinsider reported that Apple is wanting to expand the production of the Arizona-based sapphire plant to 1,700 heaters to make sapphire boules in mass. Then again, as expressed by expert Matt Margolis, the number has expanded to in excess of 2,500 heaters. Matt said:
GT's Salem, MA office measures 50,000 square feet and is likely home to a few hundred heaters in addition to the 2,500 + heaters that have been introduced in the Mesa, AZ office. GT's Salem sapphire office may mean 20 million sapphire screens on top of GT's yearly limit of 200 million or more yearly units developed from inside the Mesa, AZ sapphire plant.
The UBS downgrade guarantees that the iphone 6 won't utilize sapphire show because of supply constraints; on the other hand, as expressed above, Apple will have enough sapphire to deliver in excess of 200 million iphones. Fruit sold more or less 160 million iphones in the most recent 12 months, and experts are expecting the iphone 6's deals to be 20% more than its forerunners, which brings the figure to some place close to 182 million iphones. In this way, with a production limit of in excess of 200 million, I think Apple will have enough sapphire for both versions of the iphone, and also the iwatch. Consequently, I think the UBS downgrade doesn't bode well.
Lower Cost
Because of the high cost of assembling, sapphire shows on a little gadget bodes well. As the span of the gadget builds, the expense of making a sapphire presentation expands radically. The evaluated cost of making an iphone-sized sapphire showcase is $9-$12. Then again, the assessed screen-size of the iwatch is 1.7-inch to 2.5-inch, which implies that the expense of creating a sapphire showcase for the iwatch will be $4-$6. Because of the minimal effort of production, I am reasonably sure that the iwatch will offer a sapphire showcase.
Sapphire iwatch Makes More Sense
The essential preference of a sapphire showcase is a scratch-confirmation screen, while the fundamental detriment is that it gets smashed effortlessly. Along these lines, I think a sapphire show in the iwatch bodes well than in whatever viable gadget. As I would like to think, watches are more prone to scratches and less prone to shattering. Hence, it is imperative for a watch to have a scratch-evidence show.
In what manner Will GT Advance Technologies Benefit From The iwatch?
Fruit's iwatch is prone to hit the business sector amid the end of 2014, and examiners anticipate that it will be a high-offering item. Morgan Stanley expert Kate Huberty anticipates that the iwatch will create over $17.5 billion in yearly deals.
Accepting that the iwatch has an offering cost of $300, the aggregate deals in volume will be simply under 60 million units, and this could conceivably be an immense development driver for GT Advanced Technologies.
Descending Risks
As Apple hasn't authoritatively proclaimed that it will be utilizing sapphire within its approaching idevices, GT Advanced Technologies' offer cost could take a tremendous hit if Apple chooses to dump sapphire. Also, Corning's (GLW) Gorilla Glass is still less expensive than sapphire. Accordingly, Apple can decide to not utilize sapphire, keeping in mind the end goal to support margins.
Conclusion
GT Advanced Technologies looks all set to profit from Apple, and the UBS downgrade has made a purchasing open door for financial specialists. The stock is down 15% since the downgrade, and this may be the best open door for new speculators to purchase GT Advanced Technologies, as I anticipate that the stock will take off after the authority dispatch of the iphone 6 and the iwatch.
