A report by Digitimes is circulating today which says that Apple partner GT Advanced Technologies can only supply around 9-16% of sapphire supply for Apple’s next generation iPhone due for later in the year. The implication being that Apple would have to rely on external suppliers to make up the difference.
However, this estimate is based off GT’s apparent forecast of between $188 and $348 million from sapphire sales. As $GTAT investor and analyst Matt Margolis notes on his blog, the company has never broken down their revenue figures for sapphire so it’s unclear where Digitimes has sourced this number from.
Margolis says he spoke to industry analysts Yole Développement about potential total output. This firm believes GT could make sapphire screens at $6.40 per unit. By contrast, Digitimes’ report is based off an estimate of $30 per unit — more than three times Yole’s estimate.
Yole says that output of sapphire screens could top 42 million in 2014 and more than 85 million in 2015. In fact, even this figures are relatively conservative.
Aside from the math, it also seems very unlikely that Apple would bring about a partnership that could not reach significant scale. Nowadays, Apple sells 11 million phones in the first few days of iPhone availability. They need much higher yields than what Digitimes is quoting. Digitimes’ analysis just doesn’t hold up to scrutiny no matter what way you look at it.
