Apple’s sapphire production will be hard for Samsung, other copiers to match

“Though abundant in nature and everyday items like soda cans, aluminum didn’t figure prominently in modern electronics until just a few years ago,” Vlad Savov reports for The Verge. “Then Steve Jobs discovered an appreciation for the metal, the unibody MacBook was born, and a chain reaction was set off that finds us now able to buy precision-milled aluminum hard drives, batteries, and even cameras. How did all this come to be? And is Apple about to repeat the feat with its latest investment in manufacturing, this time focused on sapphire glass?”

“‘Aluminum is now cheaper and easier to implement thanks to Apple itself,’ says noted analyst Ming-Chi Kuo of KGI Securities. His assessment, shared by many others, is that Apple’s demand drove ‘related suppliers of aluminum casing to invest more on capacity and technology.’ They were all competing for the lucrative prize of satisfying the MacBook maker’s need to extrude, machine, anodize, and recycle vast quantities of the metal,” Savov reports. “You don’t need to agree with Steve Jobs that Apple ‘invented a whole new way of building notebooks from a single block of aluminum’ to appreciate that its change in manufacturing fundamentally altered the supply chain for the material.”

MacDailyNews Take: You know what, yes, you do need to agree that Apple invented a whole new way of building notebooks from a single block of aluminum. Because they did. This is simply fact. It’s a good idea to agree with facts lest you be considered a pain-in-the-ass nut job. Fact obliterates opinion.

“While neither Nokia nor HTC would openly acknowledge Apple’s contribution in muscling open the doors to machined-aluminum electronics, the American Aluminum Association is a little more forthcoming,” Savov reports. “Visitors to its aluminum.org homepage are greeted with a ‘Thank you, Steve Jobs’ message, followed by the tagline of ‘the man who made aluminum cool again.'”

“Once the Cupertino company has decided to adopt an expensive — or even heretofore nonexistent — technology or manufacturing method, it spends unflinchingly to find the suppliers and producers who can turn it into a reality,” Savov reports. “This brute force approach has paid off for Apple repeatedly, and also benefited the broader industry. Another example of it can be found in ViewSonic picking up the original iPad’s screens for its line of budget Android tablets after Apple no longer needed them.”

“That may be how Apple’s usually done things, but it’s not what the company is doing with sapphire. After sealing a deal with GT Advanced Technologies in November last year for the manufacture of sapphire crystals at a new plant in Arizona, Apple is now moving into the business of producing rather than merely sourcing its component materials,” Savov reports. “This is a change in strategy, but not an unforeseeable one. As Horace Dediu points out in a 2011 analysis of Apple’s manufacturing expenditure, the Cupertino company has been on a consistent path to owning more of the tools, machinery, and equipment used in the creation of its devices. Owning the entire factory is just the next step in this transition, whose goal appears to be to extend the period of exclusivity for Apple’s hardware innovations. Without outsourcing the work to others, Apple is helping to minimize the potential for any trickle-down benefits for its competitors… it will be much harder for others to copy.”

Much more in the full article – recommended – here.

“Over at The Verge they’re having a look at the economics of materials: more specifically, at how Apple has changed the economics of the use of certain materials by investing substantially in the production processes. On the subject of aluminium for cases of laptops and smartphones they get it largely correct,” Tim Worstall writes for Forbes. “It’s when we move on to Apple’s sapphire supply chain that a couple of errors slip in.

There are a number of practical distinctions between sapphire and aluminum that may also have motivated Apple’s new approach. Whereas the silvery-gray metal makes up 8 percent of the Earth’s crust and has no supply shortages, synthesizing sapphire takes a great deal of time and effort. – Vlad Savov, The Verge

Worstall explains, “Sapphire is in fact aluminium: it’s made from exactly the same (well, OK, a purer form of) aluminium oxide that aluminium metal itself is made of. The costs of doing so are higher, this is true, perhaps 20 to 30 times the $900 worth of electricity we have to use to produce each tonne of aluminium metal. But this is very much the problem that Apple is looking to address in its production deal.”

That may be how Apple’s usually done things, but it’s not what the company is doing with sapphire. After sealing a deal with GT Advanced Technologies GTAT -0.8% in November last year for the manufacture of sapphire crystals at a new plant in Arizona, Apple is now moving into the business of producing rather than merely sourcing its component materials. This is a change in strategy, but not an unforeseeable one. As Horace Dediu points out in a 2011 analysis of Apple’s manufacturing expenditure, the Cupertino company has been on a consistent path to owning more of the tools, machinery, and equipment used in the creation of its devices. Owning the entire factory is just the next step in this transition, whose goal appears to be to extend the period of exclusivity for Apple’s hardware innovations. Without outsourcing the work to others, Apple is helping to minimize the potential for any trickle-down benefits for its competitors. – Vlad Savov, The Verge

Worstall writes, “It would be interesting if that’s what Apple was doing as it would be a change in strategy. The thing is it isn’t what Apple is doing. Apple has partnered with GT, this is true. But GT still owns the factory and all of the equipment. What Apple has done is pre-purchase all of the product that will roll off the lines in that new factory for the next few years. After that GT is entirely at liberty to sell to other users. Indeed, my expectation is that Apple would love them to do so. For here’s the economic problem they’re trying to overcome (and I would note that my office is actually inside a sapphire factory and I’ve run through this with the engineers as being a reasonable description of what’s going on).”

“What GTI is doing is, now that they’ve got that large order from Apple, is making larger pieces of sapphire, thus making it cheaper per kg. And their core technology was already a method of cutting ingots which wasted less of the material,” Worstall writes. “The end result is that Apple gets cheaper sapphire sheets to use in its products. The cost to it of doing so is that it pre-paid for it all. No, it didn’t buy the factory nor invest in it. And Apple will be similarly happy as that factory supplies others in the future: for that will just drive down costs ever further as a result of those greater economies of scale. And that’s what Apple is really doing with their cash pile.”

More in the full article – very highly recommended – here.

MacDailyNews Take: Oh, but whatever will become of the slavish copiers, Samsung et al., who are currently struggling to match Apple’s 64-bit iPhone and 64-bit iPads, Apple’s Touch ID (which actually works, imagine that!) and who are still stuck peddling 32-bit antiques to the clueless ignorati?

If you think synthetic sapphire is going to be bad news for Apple’s slavish copiers, imagine if Apple uses Liquidmetal (and only Apple can use Liquidmetal, in perpetuity, no less)! That’s right Samsung, you can never, ever copy an Apple Liquidmetal product. May the frustration blow your collective head off, perpetual follower Samsung.

Related articles:
Apple begins shipping sapphire from GT Advanced’s Arizona plant to China ahead of iPhone 6 launch – April 30, 2014
How Apple’s billion dollar sapphire bet will pay off big time – April 22, 2014
Apple sapphire crystal display rumors buoy GT Advanced stock – March 17, 2014
Apple, GT Advanced Technologies, and the ‘new’ vertical integration – February 27, 2014
Apple partner GT Advanced recruiting for Jobs at Arizona sapphire plant – January 21, 2014
Apple patent application reveals sapphire flexible transparent display devices created with Liquidmetal – December 19, 2013
iPhone 6 rumors: Curved display, Liquidmetal, sapphire glass, and more – December 11, 2013
Apple spends over half a billion dollars on rumored iPhone 6 sapphire glass feature – November 29, 2013
Arizona OKs tax break for Apple sapphire glass plant – November 20, 2013
Incentives to lure Apple’s sapphire glass plant to Arizona revealed – November 19, 2013
Analyst: Sapphire likely to be used in new small form factor Apple device (Think iWatch) – November 8, 2013
GTAT able to supply sapphire for over 30 million iPhone screen covers due to Apple funding – November 8, 2013
Apple’s iPhone 6 could feature unmatched sapphire glass display – November 7, 2013
Why Apple’s new sapphire manufacturing agreement is a big deal – November 7, 2013
GT Advanced Technologies spikes on sapphire deal with Apple – November 5, 2013
Apple expands ‘Made in USA’ efforts with sapphire glass factory in Arizona, creating over 2,000 jobs – November 4, 2013
Apple strikes sapphire supply deal with GT Advanced – November 4, 2013
Gorilla glass maker Corning enters into strategic partnership with Samsung Display – October 23, 2013
Sapphire glass may be used in 2014 iPhone Retina display, sources say – September 18, 2013
Vertu COO: Apple investigated sapphire crystal displays, but found them infeasible at this time – June 13, 2013
Corning’s Gorilla Glass vs. sapphire for mobile touch displays – May 28, 2013
Apple’s next iPhone screen could be made of Sapphire – May 2, 2013
Steve Jobs, steel balls and Corning’s Gorilla Glass (with video) – January 11, 2013

29 Comments

  1. They will come out with an innovation called “Samphire” which is something else only more innovative. Of course it will turn out to be a piece of crap.

    1. Samphire is quite popular with British foodies. It’s a plant that can be found near the sea and is quite delicious, often being served as an accompaniment for fish dishes.

      There’s no way that Samsung would produce anything with as much taste as samphire.

      1. I doubt the switch to sapphire is just for scratch resistance. Sapphire has been mentioned in additional screen related innovations/patents including micro LED, enhanced capacitive touch, etc.

    1. Sapphire is indeed more brittle however how much more is the question… Gorilla Glass is actually considered to be quite brittle in the glass industry as well. The reason it’s a big thing in tech devices is that for it’s thinness it’s pretty decent and for it’s cost it’s really good. There are better alternatives but they are really expensive and cannot produce good yields at the thinness required for our devices.

      That being said if you look at Apple patents they aren’t about actually using Sapphire to make a display at all. They are all geared towards creating a laminate out of Sapphire to laminate another glass substrate with it. So *theoretically* they could take Sapphire and laminate it over Gorilla Glass to have the best of both worlds… The issue with this will be, does this make sense financially. I’d rather have a device with more starting memory (16GB is a joke in this day in age) and more RAM (app crashes on iPad air due to low memory is unacceptable) than something that is less scratch prone. Not saying this isn’t cool or neat technology; I’m just questioning whether the money would be better spent elsewhere on something that could benefit user experience.

      1. I would like to have more RAM too but remember Apps crashing due to lack of memory is an App Developer failure and nothing to do with Apple. Safari suffers from the same issue when you switch to another app and back, it ends up refreshing the pages which is annoying as hell.

    2. Only diamond is harder than sapphire. Glass is 1000 times more brittle, more likely to shatter, than diamond. Sapphire is only 10 times more likely to shatter than diamond.

      You must be a Samsung Rep. Only a Samsung Rep could be that full of shit.

      1. Material properties span a wide range of characteristics, althegeo. Please perform a bit of research on the terms toughness, hardness, brittleness, etc., before you dump on someone else in this forum.

      2. Quite true, however diamonds are also quite brittle.. I suspect Samsung will side-step sapphire altogether and proceed with their research in Graphene/synthetic graphene materials which is harder than sapphire, much more flexible and also more suited to electric conductivity applications like capacitive touch screens. Imagine a screen where you don’t NEED a laminate, sapphire or otherwise.. At the rate progress is being made in the field I expect some interesting products in 2015. 😀

  2. Apple puts a lot of effort into making a single product which is patiently honed to such a level of perfection that they can be pretty certain it will sell in tens of millions, or more likely hundreds of millions. When you’re designing products to be shipped on that scale, you can afford to invest billions to ensure exclusive supplies of esoteric materials.

    Samsung works in a quite different way. They release a large number of hastily built products and let the market decide which ones will sink or swim. As they seem to have no reliable way of predicting which products are going to sell well, it wouldn’t make sense to invest a lot of money on plant to build a single product. Samsung invariably report a highly successful opening sales period, but the reality sometimes turns out to be quite different and although Samsung tries to conceal the truth from analysts and the media, they will know the reality of their true sales numbers and will know that they can’t afford to spend large sums of money on plant without a guaranteed return on the investment.

    Apple is moving away from using off-the shelf components and is using advanced materials for it’s new iPhones. A fast follower can only copy when they can source similar materials for their products, so it’s going to be increasingly difficult for Samsung to copy Apple in future.

  3. I wonder if Apple is working to a point, what with buying/building their own manufacturing to where they can create their product from beginning to end and go back to the secrecy that allowed them to ‘wow’ the faithful when a new product of theirs was officially announced. Sorry Apple rumor new blogs…

  4. Apple know what they are doing. Most of the time we don’t fully understand their goals at the beginning. Then afterwards we wonder why no one thought of that before.

    Back in 2000, I had ripped all my CDs onto my work Mac. It was hooked up to a music box and it was cool to listen to music in the lab without having to switch songs. I remember thinking to myself wouldn’t it be cool if you could have all the songs on a portable player. The SJ did exactly that and I was blown away with how simple and elegant Apple made it.

    That was the only time I had thought along the same lines as Apple. Other times, like when the iPad came out, I was as skeptical as the rest. But Apple realized that content consumption was the main activity on the net and a device that could do that well would succeed.

  5. I’m wondering about the apparent multiple-personality aspect of MDN’s takes as of late. In other articles they make a huge point about how Samsung and it’s ilk don’t give a care in the world to patents and FRAND, and then in this article they make the claim that Apple has the same guys by the short hairs because of a liquid metal deal.

    I mean, does MDN think that matters or not? I’d argue it makes no difference, and that Samsung will rip off whatever they want to rio off–and then get their hands merely slapped in court.

    1. You do not seem to understand the Apple – Liquidmetal deal. It was explained concisely and well by MacDailyNews last August:

      The deal is basically this: Apple contributes engineers and R&D – basically figuring out how to practically make Liquidmetal into commercial parts – and contributes their inventions back to Liquidmetal (via Crucible Intellectual Property, LLC, a Liquidmetal subsidiary) which gets to use Apple’s inventions in fields other than consumer electronics (sporting goods, aviation, medical, military, etc.). In exchange, along with an already-paid one-time license fee of US$20 million, Apple owns sole rights to use Liquidmetal in electronics via “a perpetual, worldwide, fully-paid, exclusive license to commercialize such intellectual property in the field of consumer electronic products.”

      Source: http://macdailynews.com/2013/08/27/iphone-5c-could-be-the-first-apple-product-to-use-scratch-resistant-liquidmetal/

      Samsung cannot steal this one even if they wanted to.

      (Brought to you by Carl’s Jr.)

      1. I guess I still don’t, even after your concise reply. I mean, we’re talking about “rights,” correct?

        I realize it’s way easier to rip off an idea, than a manufacturing process, but why *couldn’t* they just reverse engineer a process? I mean they’ve proven that they don’t respect rights or patents.

        Against thanks for your civil reply, I guess I just don’t understand how protected this would be.

  6. I’m not sure why others would want to copy Sapphire for screens… Sure it’s the best scratch protection and virtually can not be scratched; great. It’s crazy expensive and I’m sure that will affect customers either directly with increasing the cost of the device (as this site has already rumored) or indirectly with sacrificing other features and aspects that could be upgraded in the phone to keep costs down since the Sapphire display is now being added.
    Besides I know some people scratch their screens but I’ve seen way more people lamenting over broken screens than scratched screens. Find a way to beef up the impact resistance and then you’re in business. As of now, both Apple and other top manufacturers use the latest version of Gorilla Glass for their screens so when it comes to impact protection they are on even playing ground. Trends are also leaning toward flagship devices from other OEM’s now being water proof/resistant. I’d much rather have a screen that is less likely to shatter/crack as well as can take an accidentally dip than one that just holds up better to scratches.

  7. The pedant in me feels the need to point out that the correct spelling is aluminium, as ratified by the IUPAC in 1990. This is consistent with the use of the -ium ending of virtually all metals in the periodic table, notable exceptions being mercury, gold, silver and lead (hygrogyrum, aurum, argentum and plumbum).

    Even Sir Humphrey Davy was in two minds as to what to name the element but eventually settled on aluminium. Curiously, both aluminum and aluminium appear in publications in equal usage up to the early 20th century when Websters Unabridged (1913) listed it as aluminum.

    Curious are the vagaries of the English language 🙂

    =:~)

    1. Give the pedant a rest, Chas; the Americans got it more right than wrong on this one (WP) The -um suffix is consistent with the universal spelling alumina for the oxide (as opposed to aluminia), as lanthana is the oxide of lanthanum, and magnesia, ceria, and thoria are the oxides of magnesium, cerium, and thorium respectively.

      They also got it right in dropping the useless u from colour etc. (the u isn’t proper English, it was a French affectation)

  8. FTA: ““Though abundant in nature and everyday items like soda cans, aluminum didn’t figure prominently in modern electronics until just a few years ago,” Vlad Savov reports for The Verge.”

    Didn’t figure prominently? Semiconductors used aluminum for their circuitry until IBM found a way to bond copper to silicon in the late 1990s.

  9. “If you think synthetic sapphire is going to be bad news for Apple’s slavish copiers, imagine if Apple uses Liquidmetal (and only Apple can use Liquidmetal, in perpetuity, no less)! That’s right Samsung, you can never, ever copy an Apple Liquidmetal product. May the frustration blow your collective head off, perpetual follower Samsung.”

    Well, sorta. Apple has an exclusive over one particular alloy composition and the trademark. But there are thousands of possible “liquid metals” that could be used. If not millions in fact.

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