There are a whole bunch of still-unanswered questions about Apple's plans and its schedule.
This week, a brief Digitimes story, which sketchily summarizes a new report (apparently only available for purchase) from the company's research arm. That report claims that "typical production cost for a 4-inch sapphire wafer is $30." (Currently, this appears to be true, but it's a price that GTAT has been working to break.) The Digitimes research apparently then works backward from what it says is GTAT's forecast of sapphire revenue for the balance of 2014, in the $188 to $348 million range, and factors in other data based on assuming that Apple may introduce an iPhone 6 with a 5-inch screen.
The result is an "output of 6.27-11.6 million 5-inch sapphire-made screen covers," according to the summary blogpost. "As Digitimes Research estimates that Apple will ship 70 million units of the new-generation iPhone in 2014, the output of sapphire screen covers from GTAT will account for 9.0-16.6% of the iPhone shipments."
This analysis is being disputed, particularly by GTAT investor Matt Margolis in a blogpost this week. The weakest point in Digitimes analysis is the sapphire revenue estimate.
"GT's management had stated a few weeks ago during their latest conference call that sapphire would account for more than 80 percent of their 2014 revenue," Margolis notes. "Their 2014 revenue estimate was $600-800m; at 80+ percent [for] sapphire that would account for $480-640m in sapphire revenue. The company did not break out revenue between sapphire equipment (ASF furnaces) and sapphire material." This matches The Rollup's own notes taken during that earnings call. GTAT also said that the bulk of this revenue would come in the latter half of 2014.
Margolis also talked with a leading materials industry analyst, Eric Virey, of the French consulting company Yole Développement, which covers an array of components and materials markets. "Eric estimated that GT could make sapphire screens at $6.40 per unit and they would be sold for $8.00 unit....He also estimated that 42m units could be made in 2014 and more than 85 million in 2015." Margolis argues that Virey is very (implying "overly") conservative in his estimates and that output, at least, could be higher.
It would probably have to be in 2014 to meet demand for a large-screened flagship iPhone. In October to December 2013, Apple sold a total of 51 million iPhone, though that included 5S, 5C, and at least some 4S and 4 models.
All of this data, or rather its interpretation, is already being mangled by the iOSphere. At 9to5Mac, Peter Mayo happily quoted Margolis to discredit the Digitimes Research conclusions but then showed he hadn't read Margolis, or Virey, very closely.
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