Analyst Sees Pure Sapphire in Apple’s Upcoming iPhones

Source: www.gtat.com

Source: www.gtat.com

Some of the most intriguing rumors circulating about the next-generation iPhone models are regarding Apple’s use of sapphire screens. Apple, like most other mobile device makers, currently uses Corning’s proprietary Gorilla Glass for its mobile device displays. However, sapphire is a harder, more scratch-resistant material that could give Apple’s devices a unique premium feature that will further set it apart from its high-end smartphone competitors.

While Apple already uses sapphire as a protective covering for the Touch ID fingerprint scanner and the iPhone’s camera lens, the company’s significant investment in sapphire manufacturer GT Advanced Technologies suggests that Apple’s future plans for sapphire will extend beyond small component coverings. However, due to the expense and manufacturing difficulties associated with the mass production of sapphire, some analysts have expressed doubts that Apple will widely implement sapphire screen covers in the two upcoming iPhone 6 models that are expected to be released in 4.7-inch and 5.5-inch screen sizes.

These doubts were reiterated in a recent report from The Wall Street Journal that cited unnamed “people familiar with the matter” who stated that “Apple is considering using sapphire screens in more expensive models of the two new, larger iPhones it plans to debut this fall, if it can get enough of the material.” However, PTT Research analyst Matt Margolis, who is well known for his investigative research on Apple’s partnership with GT Advanced Technologies, believes Apple has secured a larger supply of sapphire than most industry watchers realize.

“I expect Apple to cover as many iPhone 6 phones as possible this fall including both size variations,” Margolis told Wall St. Cheat Sheet. “If a shortage of sapphire occurs, it is likely Apple would use sapphire cover screens on the higher priced models in both size variations first to maximize margins and profits. However, at this point, I expect sapphire to cover a majority if not all of the iPhone 6 units sold in 2014.”

Man uses an Apple iPhone in Tokyo, Japan on July 16, 2014

Source: Atsushi Tomura/ Getty Images

Margolis previously estimated via Seeking Alpha that the production output of the sapphire plant in Mesa, Arizona was “likely to exceed 200m annual units,” more than enough to cover both upcoming iPhone models as well as the long-rumored iWatch. Earlier this year, Margolis also noted that another GT Advanced Technologies’ sapphire plant in Salem, Massachusetts may be able to produce another 20 million sapphire screens per year in addition to the 200 million units produced at the Mesa, Arizona plant. Now, Margolis has uncovered a third potential source for Apple’s sapphire needs. “Apple has recently tapped into the Chinese supply chain for additional assistance to grow sapphire for its upcoming sapphire covered product launches,” Margolis told Wall St. Cheat Sheet.

Last month, a report from the MIT Technology Review highlighted a machine at one of GT Advanced Technologies’ facilities that is able to efficiently cut ultrathin sapphire sheets. Since Apple holds a patent titled “Sapphire Laminates” that describes a method for fusing thin sheets of sapphire together with other display materials, some industry watchers have speculated that Apple would implement a sapphire laminate solution in the next-generation iPhone models in order to reduce costs. However, Margolis doesn’t believe that Apple will implement a sapphire laminate solution in its iPhones, although it may eventually use sapphire laminates in other ways.

“The benefits from a sapphire laminate solution will mimic sapphire’s scratch resistant properties, however sapphire laminates only offer partial ‘other’ benefits versus full sapphire cover screens,” noted Margolis. “As a result, I expect pure sapphire to be the end all solution until Apple can perfect an indestructible sapphire-Liquidmetal encased device sometime in the distant future.” It should be noted that Liquidmetal is a proprietary material owned by Liquidmetal Technologies. However, Apple has a licensing agreement with Liquidmetal Technologies that allows it to manufacture consumer electronics products made from the material. Although Apple has so far only used this super strong material to make the SIM card eject tool for the iPhone, there have been rumors that the Cupertino-based company will eventually expand its use to its mobile device casings or even the iWatch.

Interestingly, as noted by Margolis, pure sapphire offers other advantages besides its ability to resist scratches. “One of the most noticeable differences between pure sapphire and sapphire laminates is the performance of the touch response as a result of the dielectric properties of sapphire material,” Margolis told Wall St. Cheat Sheet. “Sapphire laminates will only offer a partial improvement in touch response over existing reinforced glass options. Pure sapphire offers a significant touch improvement over sapphire laminate solutions and existing reinforced cover glass.” In other words, not only will Apple’s sapphire screens offer users improved durability, the material may also improve the iPhone’s overall usability by making its touchscreen more responsive.

Margolis makes a compelling argument for why he thinks Apple will widely implement pure sapphire screens in its upcoming iPhone models. However, due to the usual high levels of secrecy that surrounds all of Apple’s unreleased products, no one will know exactly how the company’s sapphire plans will play out until the iPhone 6 is unveiled. Fortunately, Apple fans may not have to wait long before they find out the answer. According to insider sources cited by ReCode, Apple is planning a major media event for Tuesday, September 9.

Follow Nathanael on Twitter (@ArnoldEtan_WSCS)

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