Why Corning Isn't Scared of This Disruptive Threat To Its Newest Cash Cow

There's been a lot of talk over the past few months about the distinct possibility that smartphones of the future will begin using sapphire to protect their faces. MIT Technology Review suggested as much in March, noting that the material is stronger than Corning's ubiquitous Gorilla Glass.

That comes at a cost, though, and sapphire is still too pricey for mainstream adoption among OEMs. Apple has begun using sapphire in the camera lens cover in the iPhone 5. This is notable because Apple also sparked Gorilla Glass adoption in the first place, yet the Mac maker may be contemplating a new material for the front of future iPhones.


Sapphire camera lens covers used in the iPhone 5. Source: Apple.

Gorilla Glass has quickly become an important cash cow for Corning in the past few years, with the specialty materials segment now comprising 17% of sales. That's up from the 6% of sales that the division represented as recently as 2009. Sapphire vendors like GT Advanced Technologies could represent disruptive threats to the Gorilla Glass business if they can offer compelling sapphire alternatives at reasonable costs. GT believes it can apply a thin layer of sapphire to mobile devices as one potential method of reducing costs.

Cover and touchscreen applications of sapphire. Source: GT Advanced Technologies.

It turns out that Corning isn't scared of sapphire. The glass specialist has conducted a number of in-house tests to see how sapphire stacks up with its latest Gorilla Glass 3, with its own product coming out on top.

The study involves placing two devices -- one covered in sapphire and another sporting Gorilla Glass -- into a spinning container full of everyday objects. After a 45-minute twirl, both materials are subjected to a ring-on-ring strength test that applies pressure. Corning says that Gorilla Glass withstands more than 2.5 times as much force.

This was a proprietary study that was presumably stacked in Corning's favor, and third-party tests are yet to be released measuring the two materials. The tumble test of simulating real-world stress is common, but Corning hasn't released a detailed report of its results beyond the video linked above.

Even if sapphire does prove to be a threat in the future, at least Corning is proactively assessing the danger. The company may not be scared yet, but that doesn't mean it won't be in the future.

With the explosive growth of smartphones worldwide, many investors thought they would ride Corning's dominant cover glass to massive investment returns. That hasn't played out yet, as mobile growth has failed to offset declines in the company's core business. In this premium research report on Corning, our analyst walks through the business, as well as the key opportunities and risks facing it today. Click here to claim your copy.

The article Why Corning Isn't Scared of This Disruptive Threat To Its Newest Cash Cow originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Apple and Corning. The Motley Fool owns shares of Apple and Corning. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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