After incorrect report on Apple's use of sapphire on iPhone 6, WSJ claims Apple changed plans last m

Posted:
in iPhone edited November 2014
Less than two months ago, Daisuke Wakabayashi of the Wall Street Journal reported that Apple was "betting $700 million" on a plan to use sapphire screens on its upcoming iPhones. After being proven wrong, the writer now claims that Apple radically reversed its plans just weeks before the new devices went on sale.

Daisuke Wakabayashi speculates for WSJ


Wakabayashi's latest sapphire story for the Wall Street Journal constructs a timeline that states Apple decided "not to use sapphire" only after tests showed the material "proved brittle" and cracked, citing "people familiar with the matter."

WSJ prints speculation, blames Apple when wrong

However, in mid August the same author was reporting sapphire iPhone rumors as fact, insisting that "the first sapphire display screens for the forthcoming larger iPhone and smartwatch are expected to roll off production lines this month."

Wakabayashi was so confident in the rumor that the Wall Street Journal headlined his story, "New iPhone, A Sapphire Screen and a Higher Cost," although it also hedged the report with a minor subhead: "Apple considers using harder material in pricier models."

The report appears to have been based almost entirely upon the speculation of Eric Virey, "a senior analyst at French research firm Yole D?veloppement," who had been promoting the idea that Apple had partnered in GT Advanced specifically with iPhone screens in mind.

The speculation claimed that the two firms planned to rapidly ramp up production for the material for new iPhones within just a few months of launch, ostensibly before even bothering to test whether sapphire "proved brittle" in actual use.

Apple never commented on its actual plans for GT Advanced. It has long been known that Apple has a variety of needs for sapphire production, ranging from the protective lens covering iPhone cameras to the transparent armor used to protect Touch ID sensors. Apple has since revealed that more expensive models of Apple Watch would also use sapphire screens, but those devices will also use jewelry-grade stainless steel or 18k gold, unlike any consumer-priced product Apple currently makes.

Speculation Gone Wild Video

Wakabayashi's August report for the Wall Street Journal was accompanied by a video interview of the author. A host introduces Wakabayashi by confidently claiming, "Apple is spending $700 million on sapphire screens for its new phones!"

In the video, Wakabayashi appears to be fully aware that he is reporting speculation as fact, initially retreating to the safer prediction that Apple was merely "looking into sapphire, which is a lot harder to scratch." August would be a bit late to be "looking into" the use of an expensive new material that needs to flawlessly ship on millions of units within a few weeks.

Asked by the host if sapphire would prevent screens from ever cracking or breaking, Wakabayashi answered "yeah. So, it's kinda hard to say, and I know it's not the best answer, but basically we don't know exactly what the sapphire... the strength of the sapphire depends on the cut and thickness that Apple is going to use. But sapphire as a material is much, much stronger than glass, and therefore should prevent, uh, damage to your screen."



The host then reminded watchers, "Apple is still being pretty hush hush as they almost always are!" before asking, "but do we know if this is going to be a change in all iPhones? Is is just going to be some of the higher end phones? How is this going to work?"

Wakabayashi answered that "sapphire is much more expensive than glass to manufacture, so for now what we're hearing from the supply chain is that Apple is looking at putting it in the high end phones, like the ones with greater memory, which are more expensive, so you don't notice the price difference as much."

Brainstorming disastrous consequences for Apple's apocryphal sapphire screens

After stating that sapphire screens were entering production just weeks before Apple unveiled its new iPhone 6 models, Wakabayashi also presented related speculation of potential doom, including guesstimates from Virey claiming that moving from glass to sapphire screens would dramatically increase Apple's per unit costs from $3 to $16.

While admitting that the Wall Street Journal and its sources had no idea of the specifics in terms of the "cut and thickness that Apple is going to use," the author confidently reported an exact dollar amount on the costs per unit Apple would incur to make this move, then cited Matt Margolis, "an analyst at PTT Research and a GT investor," as speculating that "if Apple doesn't raise prices, the higher cost could erode the iPhone's profit margins," but that "Apple may be willing to absorb the hit to separate its products from those of rivals."As it turns out, Wakabayashi's written and videotaped speculation based on "supply chain" chatter and analyst thoughts was completely wrong

Wakabayashi also added that sapphire would contribute to additional weight, and added comments from sapphire-competitor Corning Glass that claimed that regular glass performed better in breakage tests and reflected less light than sapphire.

As it turns out, Wakabayashi's written and videotaped speculation based on "supply chain" chatter and analyst thoughts was completely wrong. But rather than admitting that it reported a dubious rumor as a well sourced fact, today's reporting by the Wall Street Journal backtracked to say that it earlier only "reported in August that Apple was considering using sapphire screens for some iPhones."

Speaking in the passive voice, Wakabayashi now explains that "sapphire was seen as a potential solution to a big problem for iPhones and other smartphones--broken or scratched screens," without actually saying that he helped invent and promote the idea as a virtual certainty, while at the same time questioning whether it was even a good idea.

Wakabayashi again cited Virey as saying that his GT plant capacity estimate "suggests Apple had planned to use the sapphire screens for more than the watch," while Virey himself stated, "for me, there is absolutely no doubt that it was for the smartphone."

Apple has never promoted the idea that sapphire iPhones were coming, nor even acknowledged any need to improve its screens at tremendous expense. On the other hand, Apple's equally massive investments in technologies such as Touch ID fingerprint sensors and the advanced custom design of its A7 and A8 Application Processors took years to develop, rather than being last-minute feature inclusions tacked on a few weeks before mass production began.

Somewhat ironically, after Apple acquired AuthenTech but before it unveiled Touch ID, the company's apparent plans were taken to task by fingerprinting expert Geppy Parziale, who described a catch-22 problem for consumer-grade sensors which wear out in regular use, while "the coating layer on the fingerprint sensor surface cannot be too thick otherwise the electrons from your body cannot reach the metallic surface of the sensor to generate a fingerprint image."

"Unfortunately there is no existing solution to this," Parziale claimed. "Manufacturers can only try to make the fingerprint sensor last longer, but sooner or later that device will stop working properly." Apple's innovative solution was to use a thin layer of sapphire to protect the delicate sensor.

Touch ID

Similar speculative doom for iPhone 5c

Last year, the same Wall Street Journal staff (including Lorraine Luk and Eva Dou, who assisted on Wakabayashi's sapphire iPhone reports) joined Reuters in stating that Apple had dramatically "cut iPhone 5c orders," while speculating that the cuts were "fueling concerns about weaker-than-expected consumer demand and the company's pricing strategy."

The site backpedaled its story by the end of the day, changing its headline to "Apple's Dual iPhone Strategy in Doubt," while shifting the narrative to focus on the idea that Apple's plan to "broaden its appeal with a cheaper version of the iPhone [...] appears to be faltering after a few weeks."

As it turned out, Apple's iPhone 5c turned out to be one of the most successful smartphone launches of the year, outselling all Blackberry phones, all Windows Phones, and every individual Android flagship in its first quarter.

The maligned model's sales have continued to remain healthy, with half of iPhone 5c buyers coming directly from Android.

iPhone 5c


In January, rather than admitting they were wrong about iPhone 5c, Luk and Dou joined Wakabayashi in reporting that Apple was "expected to scrap" iPhone 5c and its plastic construction when it introduced new larger iPhone 6 models later in the year. Apple continues to sell iPhone 5c.

Rumors weren't wrong, Apple changed its plans!

The inability of the Wall Street Journal to admit that its ostensibly "well sourced" reports are often based on deeply flawed analyst speculation and notoriously unreliable "channel checks" is earning the famed paper a reputation on par with rumor blogs that claim to know everything about what Apple is doing yet report false leads and fail to anticipate major new developments.

Just prior to WWDC this summer, 9to5 blogger Mark Gurman published a "rumor roundup" that incorrectly predicted new "Healthbook," TextEdit and Preview apps for iOS; the "removal" of Game Center; the addition of a "Control Center for OS X" and an iPad "split screen UI" and a secondary iPad display feature.

Those predictions were not only wrong, but failed to foresee virtually all of the significant new features Apple unveiled for iOS 8 and OS X Yosemite, ranging from Apple's entirely new Swift programming language and Metal API to OS X Yosemite's new focus on Spotlight search; a new Widget store for Notification Center; new privacy and performance features in Safari; new Messages features; new Mail markup features; the new iCloud Drive; any hint of the new Handoff, Instant Hotspot, SMS/Phone integration between iOS and OS X that Apple collectively referred to as "Continuity"; the new iCloud Photo Library and revamped Photo apps for iOS and Mac; new Keyboard features and third party flexibility; new Family Sharing; and new enterprise features, including connectivity with third party cloud storage services.

Rather than admitting he was wrong, Gurman later insisted on twitter, "I am convinced Apple completely redesigned Healthbook and dropped the 'book' because of the leak," virtually the same response Wakabayashi gave after realizing that iPhones weren't getting the sapphire screens his sources had predicted.
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Comments

  • Reply 1 of 59
    Judging by eBay, water is a much more serious threat to iPhones than cracked screens. It is easy to get a cracked screen replaced but once an iPhone gets wet, it is dead for good in most cases. I have my fingers crossed that the Apple Watch shows the future of Apple's mobile products: Completely sealed and water resistant.
  • Reply 2 of 59
    macinthe408macinthe408 Posts: 1,050member
    Amazing that people get years in prison for selling one share of a company for a $10 profit using insider information, yet jackasses such as this go unscathed when their comments can swing the fortunes of a company, as they get to use semantics to get them out of sticky situations (e.g., Apple is looking into).

    Fucker.
  • Reply 3 of 59
    I like that DED is giving us regular articles now.
  • Reply 4 of 59
    lolliverlolliver Posts: 444member
    I like that DED is giving us regular articles now.

    Yeah it's great not having to wait till the weekend.
  • Reply 5 of 59
    buckalecbuckalec Posts: 199member
    Great insight once again, reaffirms my dismay in mass media. You just need to watch three minutes of Bloomberg, CNBC & WSJ to realize all hope is lost. Long live the Horace Dedui's of this world.
  • Reply 6 of 59
    slurpyslurpy Posts: 5,345member
    Complete horse-shit. You don't change a critical component such as a screen at the "last minute" when you're having a launch as insanely massive as the iPhone, with 10 millions phones being queued up for sale on day 1. This guy is wrong, and has always been wrong, but is too much of a coward to admit it. I'm sure Apple experimented with sapphire. Its a reach to say anything else.
  • Reply 7 of 59
    rogifanrogifan Posts: 10,669member
    It blows my mind how many people actually believe just weeks before the iPhone announcement Apple was still deciding whether to use sapphire for screens or not. So we're supposed to believe Apple had 10s of millions of gorilla glass screens waiting in the wings and at the last minute decided to switch from sapphire to glass? I'm sorry but I think that's nuts. Apple would have known well before July or August what displays were going to be used on the new iPhones. Apple never said what it would be using the sapphire for.
  • Reply 8 of 59
    dewmedewme Posts: 4,164member
    Sad to see the Wall Street Journal turn into the Wall Street Urinal.

    They used to have a good thing going. Now they've lost their objectivity and credibility- and for what?
  • Reply 9 of 59
    robin huberrobin huber Posts: 3,585member
    When your conclusion is proven wrong, change the facts that supported it. This guy is funny, should call him "Andrew Daisuke."
  • Reply 10 of 59
    analogjackanalogjack Posts: 1,073member

    There is something vaguely Orwellian in an analyst who got everything wrong saying "my predictions were 100% accurate, it's Apple who are wrong because their products did not match my accurate predictions"

  • Reply 11 of 59
    jupiteronejupiterone Posts: 1,564member

    Wakabayashi's <a href="http://online.wsj.com/articles/gt-advanced-technologies-files-for-bankruptcy-1412607074">latest sapphire story</a> for the <em>Wall Street Journal</em> constructs a timeline that states Apple decided "not to use sapphire" only after tests showed the material "proved brittle" and cracked, citing "people familiar with the matter."

    Even if this were somehow believable, knowing Apple's secretiveness, wouldn't "people familiar with the matter" be Tim Cook, Jony Ive and about a handful of senior engineers?
  • Reply 12 of 59
    rogifanrogifan Posts: 10,669member
    jupiterone wrote: »
    Even if this were somehow believable, knowing Apple's secretiveness, wouldn't "people familiar with the matter" be Tim Cook, Jony Ive and about a handful of senior engineers?
    The only thing believable is this sapphire was never meant for iPhone screens. It's meant for camera len covers, Touch ID and ?Watch.
  • Reply 13 of 59
    bizlawbizlaw Posts: 13member
    There's no way Apple could have switched to traditional glass from sapphire and still had time to produce millions of iPhone 6 and 6 Plus models. Not a chance. This is a CYA job by Wakabayashi all the way. He was wrong and simply won't admit it.

    Will Apple use sapphire in the iPhone at some point? Probably, but obviously it was not ready. And these supposed professional analysts should have known that, seeing as the Mesa, AZ plant has only been open and operating for a few months but yet it takes many weeks to grow sapphire crystals. To have enough sapphire, even if there weren't any cracking/brittle problems, would take many months just for the first run of iPhones.

    Per usual, the tech media gets it wrong. They seem to think that once Apple acquires something, then it will be immediately integrated into the next iPhone, no matter when that release is due. Never mind the planning and engineering requirements. After all, Apple just uses pixie dust to magically design things, so time is irrelevant.
  • Reply 14 of 59
    anomeanome Posts: 1,474member
    I'm still disappointed they decided at the last minute to replace the unicorn horn shell with aluminium.

    Yet another analyst who was wrong, desperately trying to prove he was right. Up there with Gene Munster and the TV set.
  • Reply 15 of 59
    cpsrocpsro Posts: 2,981member

    Whatever happened with (to?) the people who spread false rumors of Steve Jobs' early demise, in 2008-2010?

  • Reply 16 of 59
    Wakabayashi is a clown.
  • Reply 17 of 59
    ash471ash471 Posts: 705member
    Quote:

    Originally Posted by bizlaw View Post



    There's no way Apple could have switched to traditional glass from sapphire and still had time to produce millions of iPhone 6 and 6 Plus models. Not a chance. This is a CYA job by Wakabayashi all the way. He was wrong and simply won't admit it.



    Will Apple use sapphire in the iPhone at some point? Probably, but obviously it was not ready. And these supposed professional analysts should have known that, seeing as the Mesa, AZ plant has only been open and operating for a few months but yet it takes many weeks to grow sapphire crystals. To have enough sapphire, even if there weren't any cracking/brittle problems, would take many months just for the first run of iPhones.



    Per usual, the tech media gets it wrong. They seem to think that once Apple acquires something, then it will be immediately integrated into the next iPhone, no matter when that release is due. Never mind the planning and engineering requirements. After all, Apple just uses pixie dust to magically design things, so time is irrelevant.

    Wrong.  There is no Way Apple would have tried sapphire without a backup plan. The contract on the backup plan probably had a two month lead time and Apple pulled the trigger when GT couldn't meet quality requirements.  Seems pretty obvious what happened.

  • Reply 18 of 59
    ash471ash471 Posts: 705member
    Quote:

    Originally Posted by Slurpy View Post



    Complete horse-shit. You don't change a critical component such as a screen at the "last minute" when you're having a launch as insanely massive as the iPhone, with 10 millions phones being queued up for sale on day 1. This guy is wrong, and has always been wrong, but is too much of a coward to admit it. I'm sure Apple experimented with sapphire. Its a reach to say anything else.

    You can change a critical component as long as you have a backup plan.  duh

    It's not a reach to say they were planning on using sapphire on iPhone 6.  GT's bankruptcy filing makes it really clear that was the plan.  GT didn't meet production quotas and Apple pulled the plug.  GT has 10 times the capacity they need and owes a lot of people a lot of money for equipment they can't pay for.

     

    Apple just hosed all of GT's equipment suppliers and lenders.  This is the beauty of contract manufacturing. Good business Tim.  Glad I own your stock and not GT's.  

  • Reply 19 of 59
    ash471ash471 Posts: 705member

    DED, I enjoy your columns, but I think you got it totally wrong on this one. If Apple wasn't planning on using sapphire for the iPhone 6, why is GT filing bankruptcy? Seems pretty obvious what happened.  Apple experimented with sapphire and shifted the manufacturing risks to its contract manufacturer.  Unfortunately for GT, it didn't work out. 

  • Reply 20 of 59
    Quote:

    Originally Posted by GrangerFX View Post



    Judging by eBay, water is a much more serious threat to iPhones than cracked screens. It is easy to get a cracked screen replaced but once an iPhone gets wet, it is dead for good in most cases. I have my fingers crossed that the Apple Watch shows the future of Apple's mobile products: Completely sealed and water resistant.



    I know, right?  Since apple copied so many elements of android in both iOS 7 and iOS 8, and since apple is following Samsung's leadership with respect to screen size, I was really hoping that apple would take a few more cues from the competition, including waterproof phones like those from Samsung, Kyocera, or Sony. The latest iphones aren't even ipx 3 like HTC.



    Its too bad they control the OS.  We are fully dependant on them to bring a waterproof phone to market.  Its not like Sony can make us a waterproof iOS phone.

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