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Don't Weep Like A Willow: Bendable Glass Not Likely For iPhone 5

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Steve Jobs at Apple Worldwide Developers Conference 2007

Imagine a phone wrapped in curved glass.  If done right this is the next revolution in the industrial design of mobile devices including phones.  There is no one better at implementing sleek, new industrial designs than Apple (AAPL).

Apple iPhone 4s came under criticism because its shape and form did not change from iPhone 4.  There is much speculation about the look of iPhone 5.  As attractive as the innovation of completely encasing a phone in curved glass from front to back, in my opinion this innovation will not likely be there in iPhone 5.

Corning (GLW), the maker of popular Gorilla Glass, has introduced another innovation in the form of a flexible glass that is as thin as paper.  Corning calls it Willow Glass.

Willow Glass screen can be as thin as 100 microns.  Imagine the enhancement to the sensitivity of touch screens when such a paper thin glass is used. It will give rise to a number of innovative features in mobile devices never seen before.

Willow Glass can be used to completely wrap a device from front to back.  This opens up the industrial design to all kinds of shapes and forms that were unthinkable in mobile devices until now.

According to Corning, Willow Glass  will support thinner backplanes and color filters for both organic light emitting diodes (OLED) and liquid crystal displays (LCD) in high-performance, portable devices such as smartphones, tablets, and notebook computers. This new, ultra-slim flexible glass will also help develop conformable (curved) displays for immersive viewing or mounting on non-flat surfaces.

“Displays become more pervasive each day and manufacturers strive to make both portable devices and larger displays thinner. Corning Willow Glass provides the substrate performance to maintain device quality in a thin and light form factor,” said Dr. Dipak Chowdhury, division vice president and Willow Glass program director. “Currently manufacturing in a sheet-to-sheet process, we expect Corning Willow Glass to eventually allow customers to switch to high-throughput, efficient roll-to-roll processing, a long-awaited industry milestone.”

It is well known that Steve Jobs pushed Corning hard to expedite glass for iPhone 4.  There are no indications that Apple has made such a push for Willow Glass.

Corning is currently providing samples of Willow Glass.  It is highly likely that Corning and Apple are collaborating to use Willow Glass in iPhone 6.

Samsung (SSNGY) is already planning to launch mobile phones with flexible displays this year.

From an investment perspective, it is conceivable that Samsung and LG may develop a considerable lead over Apple because of the considerable expertise Samsung and LG have developed with OLED technology.  For background, please see Apple Feels Heat From Steve Jobs' Display Choices.  Samsung has already demonstrated OLED displays inside rigid enclosures that keep the screens curved.

Innovations at Corning have not recently moved this stock.  As an example, Gorilla Glass has been a major hit, but has not moved Corning stock.  Based on traditional measures Corning stock has been inexpensive.  Those who used traditional fundamental measures simply got caught in a value trap.  Those who used traditional technical analysis also have not had much success with Corning stock.

The reason traditional analysis has not produced financial gains in Corning stock is simply because legacy business of Corning is large enough to dwarf innovations.

Willow Glass is also not likely to move Corning stock.  Two interesting beneficiaries from Willow Glass may be two small companies Universal Display (PANL) and ZipBoard.  These companies may be able to drive higher licensing revenues from their patents as Willow Glass becomes popular.

About Me: I am an engineer and nuclear physicist by background. I have founded two Inc. 500 companies, and have been involved in over 50 entrepreneurial ventures. I am the chief investment officer at The Arora Report, which publishes four newsletters to help investors profit from change. Please feel free to write me at Nigam@TheAroraReport.com.

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Full disclosure: Subscribers to The Arora Report are long Apple from $131 and have taken partial profits at $360, $525 and $629.