Tapping is the new clicking... And iPhone swipe/touch/scroll is like a massage for Corning's key product: the iPhone screen. The glass legend was founded before the Civil War in Corning, NY (population 10,700 and it's still HQ'd there). It supported the creation of the light bulb, car windshields, and — in 2006 — the iPhone. And it just earned a $250M investment from Apple.
One's not like the other... Seems weird that Apple's investing in a 19th-century supplier of glass parts. But it makes sense for two reasons:
- Public Relations pandering: All iPhones are made in China. To show it's contributing to American jobs too, Apple put $6B into the Advanced Manufacturing Fund to support its American parts suppliers. This was one of its investments.
- Product tempting: Apple needs new features to convince you to splurge/upgrade to future iPhones. Corning's using the $$$ for its scratchless "Gorilla Glass" – it's researching new versions for foldable phones and glass-backed wireless charging.
Tiny slice of good news, big slice of bad... Corning's Apple announcement was outmatched by a bad one about the rest of its biz. Corning also makes TV screens and fiber optic cables (for the telecom industry) — The stock dropped 7% after its earnings revealed the outlooks for both are dimmed. Looking at where its revenues come from, it's clear why:
- 12.5% of sales = Specialty Materials (like Gorilla Glass): The Apple news affects this part of Corning.
- 87.5% of sales = Other glass sales: This part's all non-Apple products. — nearly all of Corning's revenues. That's what investors focused on this week.