Apple and GT Advanced’s sapphire deal is bigger than you think

Earlier this week, Apple and GT Advanced confirmed the two companies were working together on a sapphire production facility in Mesa, Arizona. A closer look at the numbers behind this deal suggests it may be more significant than it first appeared. As noted by Cantor Fitzgerald analyst Brian White, GT Advanced is expecting its sapphire business to boom in 2014, thanks in part to the investment from Apple. In 2013, sapphire sales accounted for about 11 percent of the company’s year-to-date sales revenue, which tallies up to $28.9 million. In 2014, GT Advanced predicts its revenue will balloon to $600 to $800 million with 80% of it sales coming from its improved sapphire business. This calculates out to $480 to $640 million in revenue from sapphire alone, which is 16x increase in revenue for that product category. AllThingsD suggests this deal hints at bigger plans and broader uses of sapphire in future Apple products. Sapphire is currently used to cover the camera on Apple’s iPhone handsets and in its Touch ID fingerprint sensor. The potential expanded use of sapphire could be a sign that Apple is moving away from Gorilla glass and towards sapphire in future touchscreen displays. It could also be a hint that sapphire could land in the rumored iWatch. [Image from GT Advanced] Continue reading →

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