Why Apple’s Adoption of Sapphire May Not Have Much Impact On Corning


Using the amount for Gorilla Glass sales to Apple and the Trefis widget for Corning’s specialty materials revenue (below), we can assess the impact Apple’s move to sapphire will have on our stock price estimate. By reducing the specialty materials revenue by $187 million for 2014, we will be able to simulate a loss of sales when Apple stops purchasing Gorilla Glass from 2014 onward. We can see that our stock price estimate for Corning declines from $18.88 to $18.56, a decrease of $0.32.

To assume Apple’s move to sapphire for cover glass applications will stop at Apple seems wrong; most likely all of Apple’s competitors such as LG, Samsung, Sony, etc. will also shift to sapphire cover glass for their top-of-the-line smartphones. And that most likely will have quite a bit of an impact on Corning’s Gorilla Glass business.