Weak non-iPad tablet sales reduce demand for Gorilla Glass
Citing weaker-than-expected demand for tablets, Corning has reduced its sales forecast for Gorilla Glass, though disappointing sales are believed to be related to non-iPad tablets, not Apple.
Corning dropped its sales forecast for the fourth quarter of calendar 2011 to a loss of 25 percent quarter over quarter, down from its previous prediction of negative 15 percent. The company said the revised sales estimate is due to a lower demand for its scratch-proof Gorilla Glass for tablets.
Reacting to the news, analyst Maynard Um with UBS said in a note to investors on Wednesday that he believes the reduced forecast is related to weaker non-iPad demand, and is not a sign of slowing sales for Apple.
He estimates that Apple could have accounted for about 80 percent of Corning's Gorilla Glass revenue through December of 2010, but that number is now believed to have dropped to about 50 percent from March to September of 2011.
Um is standing by his estimate that Apple will sell 12 million iPads in the current December quarter, adding that he is "not worried." Even if iPad sales were to somehow buck the trend and drop 10 percent sequentially, he estimates the earnings per share impact would be only 11 cents, or about 1 percent.
Following what he called "weaker than expected" iPad sales in Apple's September quarter, Um took a more conservative outlook on tablet sales than he had previously adopted. He said it's possible that the ongoing recession could have caused some consumers to prefer a more traditional computer form factor with greater functionality.
Teardowns of Apple's iPhone 4 and iPhone 4S have revealed their glass is made of Gorilla Glass from Corning. The special glass is said to be 20 times stiffer and 30 times harder than plastic, thanks to a chemically strengthened alkali-aluminosilicate material. It's believed the same material is used to create the glass screen for the iPad.
There have been some recent concerns that Apple has reduced orders for the iPad 2 in its current quarter, but one report from earlier this month indicated that the company did so because it purchased an excess of components last quarter. Still, rumors have persisted that iPad sales are on the decline, and those claims continue with the release of products like the $199 Kindle Fire and Corning's declining Gorilla Glass sales.
But even as those rumors persist, there are other signs that iPad sales continue to grow. One poll of Apple's retail stores on Black Friday last week found that iPad sales were up 68 percent from the same day in 2010, with stores selling an average of 14.8 iPads per hour. And Apple Chief Financial Officer Peter Oppenheimer has said Apple expects to set new company records for both the iPhone and iPad during the current December quarter.
Last quarter, Apple set a new record for iPad sales, reaching 11.2 million units in the three-month period. Total iPad sales are now greater than 40 million, and Apple Chief Executive Tim Cook said he believes that the tablet market will eventually be bigger than the traditional PC market.
"There will be many, many more people that can access it," Cook said during his company's quarterly earnings conference call. "And the ease of use is so phenomenal and off the charts that I think it's a huge opportunity for Apple across time."
Corning dropped its sales forecast for the fourth quarter of calendar 2011 to a loss of 25 percent quarter over quarter, down from its previous prediction of negative 15 percent. The company said the revised sales estimate is due to a lower demand for its scratch-proof Gorilla Glass for tablets.
Reacting to the news, analyst Maynard Um with UBS said in a note to investors on Wednesday that he believes the reduced forecast is related to weaker non-iPad demand, and is not a sign of slowing sales for Apple.
He estimates that Apple could have accounted for about 80 percent of Corning's Gorilla Glass revenue through December of 2010, but that number is now believed to have dropped to about 50 percent from March to September of 2011.
Um is standing by his estimate that Apple will sell 12 million iPads in the current December quarter, adding that he is "not worried." Even if iPad sales were to somehow buck the trend and drop 10 percent sequentially, he estimates the earnings per share impact would be only 11 cents, or about 1 percent.
Following what he called "weaker than expected" iPad sales in Apple's September quarter, Um took a more conservative outlook on tablet sales than he had previously adopted. He said it's possible that the ongoing recession could have caused some consumers to prefer a more traditional computer form factor with greater functionality.
Teardowns of Apple's iPhone 4 and iPhone 4S have revealed their glass is made of Gorilla Glass from Corning. The special glass is said to be 20 times stiffer and 30 times harder than plastic, thanks to a chemically strengthened alkali-aluminosilicate material. It's believed the same material is used to create the glass screen for the iPad.
There have been some recent concerns that Apple has reduced orders for the iPad 2 in its current quarter, but one report from earlier this month indicated that the company did so because it purchased an excess of components last quarter. Still, rumors have persisted that iPad sales are on the decline, and those claims continue with the release of products like the $199 Kindle Fire and Corning's declining Gorilla Glass sales.
But even as those rumors persist, there are other signs that iPad sales continue to grow. One poll of Apple's retail stores on Black Friday last week found that iPad sales were up 68 percent from the same day in 2010, with stores selling an average of 14.8 iPads per hour. And Apple Chief Financial Officer Peter Oppenheimer has said Apple expects to set new company records for both the iPhone and iPad during the current December quarter.
Last quarter, Apple set a new record for iPad sales, reaching 11.2 million units in the three-month period. Total iPad sales are now greater than 40 million, and Apple Chief Executive Tim Cook said he believes that the tablet market will eventually be bigger than the traditional PC market.
"There will be many, many more people that can access it," Cook said during his company's quarterly earnings conference call. "And the ease of use is so phenomenal and off the charts that I think it's a huge opportunity for Apple across time."
Comments
Teardowns of Apple's iPhone 4 and iPhone 4S have revealed their glass is made of Gorilla Glass from Corning.
This is bad reporting. Tracing back all the links, the iFixit site actually says this:
"The front glass panel of the iPhone is reported to be constructed of Corning Gorilla Glass"
I'm not aware that this has ever been confirmed. My recollection of discussions at the time were that Apple actually didn't use Gorilla Glass. So it would be good for AI to cite a source if they are claiming otherwise.
Let's face it HP and RIM never did sell a lot of devices. I'm not sure what Amazon uses or even Barnes and Noble but they are growing sales. In the end I suspect that the only thing holding up IPad sales is Christmas after which the current model will move like a turtle out of the stores. This due to the anticipation of a new iPad 3. I suspect there is very very strong interest in an IPad 3 with a resolution doubled screen.
I'm not convinced that this isn't an indication of slowing iPad sales.
It isn't because it has never been confirmed that the iPads use Gorilla Glass
Too bad apple is too cheap to use Gorilla Glass. Would prevent a lot of cracked phones.
Have you fact checked your reality? The Frobes articles states, "December 2010, Apple accounted for about 80% of Corning?s Gorilla Glass revenue." So where are they using all this Gorilla Glass if not in their iDevices where a large, thin touchscreen panel needs a durable glass?
It isn't because it has never been confirmed that the iPads use Gorilla Glass
¿Que? That reads like you're excluding the possibility simply because a confirmation hasn't been established.
I'm not aware that this has ever been confirmed. My recollection of discussions at the time were that Apple actually didn't use Gorilla Glass. So it would be good for AI to cite a source if they are claiming otherwise.
Read SJ biography. It's written quite clearly not only did Apple use gorilla glass for iPhone (from the 1st one) the company that made the glass actually started manufacturing gorilla glass because of iPhone (changing their entire factory).
I'm not sure what Amazon uses
The Kindle Fire uses gorilla glass. The e-ink Kindles do not.
Have you fact checked your reality? The Frobes[sic] articles states, "December 2010, Apple accounted for about 80% of Corning?s Gorilla Glass revenue."
It would have been helpful if you provided a link. Here's what I found:
http://www.forbes.com/sites/ericsavi...le-ipad-issue/
"UBS analyst Maynard Um estimates that through December 2010, Apple accounted for about 80% of Corning?s Gorilla Glass revenue."
So now we're passing this off to a UBS analyst's "estimates". Where is the original source link for that quote? (I can't find it.) Does Maynard Um know what he's talking about?
I'm not claiming (nor really care) that Apple uses or doesn't use Gorilla Glass, but someone, somewhere has to provide solid evidence before we base any assumptions on it's sale figures as a proxy for iPad sales.
Too bad apple is too cheap to use Gorilla Glass. Would prevent a lot of cracked phones.
You seriously need a Reality check here...
Apple contacted Corning few years before they announced the iPhone. At that time, Corning had patent for the Gorilla glass but never produce it before Apple ask them samples.
It was part of the deal where both party can't mention each other relation, but every Apple glass product (iPod, iPhone, iPad, MacBook, iMac) are using Corning Gorilla glass from day 1.
Read SJ biography. It's written quite clearly not only did Apple use gorilla glass for iPhone (from the 1st one) the company that made the glass actually started manufacturing gorilla glass because of iPhone (changing their entire factory).
Does it quote Steve Jobs saying "Corning Gorilla Glass" by name? If so, that's good enough for me. Otherwise I wonder if people aren't throwing the term around generically (kleenex) to describe 'tough glass'.
Does it quote Steve Jobs saying "Corning Gorilla Glass" by name? If so, that's good enough for me. Otherwise I wonder if people aren't throwing the term around generically (kleenex) to describe 'tough glass'.
SJ Bio mentioned Corning alkali-aluminosilicate glass. Steve Jobs personally sent a graceful note to Corning CEO to thanks him for their help and note "Without Corning, Apple wouldn't have been able to create the iPhone".
Does it quote Steve Jobs saying "Corning Gorilla Glass" by name? If so, that's good enough for me. Otherwise I wonder if people aren't throwing the term around generically (kleenex) to describe 'tough glass'.
Considering the dissenters aren't saying that Apple doesn't use any alkali-aluminosilicate glass, but that the iPhone cracks, breaks, scratches and is otherwise inferior because they don't use Gorilla Glass. This makes the argument over whether it's Corning or one of their competitors (e.g.: Ahasi's Dragontail) moot.
edit: Here's a video of Dragontail (note: I think Apple is using Corning's product): http://www.youtube.com/watch?v=WpbOoQpwAFs
SJ Bio mentioned Corning alkali-aluminosilicate glass. Steve Jobs personally sent a graceful note to Corning CEO to thanks him for their help and note "Without Corning, Apple wouldn't have been able to create the iPhone".
Yes, we know all about that for versions 1, 2 and 3, but nothing has ever been confirmed for versions 4 and 5.
This is bad reporting. Tracing back all the links, the iFixit site actually says this:
"The front glass panel of the iPhone is reported to be constructed of Corning Gorilla Glass"
I'm not aware that this has ever been confirmed. My recollection of discussions at the time were that Apple actually didn't use Gorilla Glass. So it would be good for AI to cite a source if they are claiming otherwise.
According to the Steve Jobs biography, Apple has been using Gorilla Glass from Corning since BEFORE it was marketed as Gorilla Glass. They called Corning to solve a problem and Corning pulled Gorilla Glass out to meet the need. That was for the iPhone classic.
Considering the dissenters aren't saying that Apple doesn't use any alkali-aluminosilicate glass, but that the iPhone cracks, breaks, scratches and is otherwise inferior because they don't use Gorilla Glass. This makes the argument over whether it's Corning or one of their competitors (e.g.: Ahasi's Dragontail) moot.
... but not moot considering the article.
Read SJ biography. It's written quite clearly not only did Apple use gorilla glass for iPhone (from the 1st one) the company that made the glass actually started manufacturing gorilla glass because of iPhone (changing their entire factory).
Read the 571-page biography? These guys can't even read the article this thread is attached to! lol. These guys also deny the US ever went to the Moon.
SJ Bio mentioned Corning alkali-aluminosilicate glass. Steve Jobs personally sent a graceful note to Corning CEO to thanks him for their help and note "Without Corning, Apple wouldn't have been able to create the iPhone".
Ok, thanks.
I'm not sure there has ever been a definitive confirmation prior to the biography. Perhaps this was part of an agreement, as you said, between Apple and Corning where they don't mention each other by name (although Apple certainly mentions Intel and a few other key vendors), but if it was incorrectly inferred by careless analysts and then perpetuated by the press, it certainly wouldn't be the first time that has happened.
Yes, we know all about that for versions 1, 2 and 3, but nothing has ever been confirmed for versions 4 and 5.
This picture from the iPhone 4 video, show some alkali-aluminosilicate glass being demonstrated. We have to take a lot of steps to say the IPhone 4/4S aren't using this technology.