
Apple Bought $578M Worth of Sapphire - sc90
http://techcrunch.com/2013/11/08/why-apple-bought-578m-worth-of-sapphire-in-advance/
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IBM
This is what makes it difficult to compete with Apple. These types of
prepayments allow Apple to negotiate favorable deals for components that the
manufacturer will happily sell at razor-thin margins. In order for the
competition to produce an equivalent product on a hardware level, they would
have to be willing to accept much lower margins than what they have. And
there's no guarantee that they'll sell as well, making the investment in those
materials risky.

~~~
runako
Apple competes against companies like Samsung (2012 ad budget: ~$4B) and
Microsoft (2012 ad budget: ~$2.75B).

This is not a lot of money in the markets where Apple competes.

~~~
selectodude
Apple just purchased 15 percent of Samsung's entire worldwide advertisement
budget in just sapphire.

That's a pretty enormous chuck of change, even for massive corporations such
as Samsung.

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mcintyre1994
For comparison's sake, Apple's ad budget in 2012 was $1 billion [0], so they
just purchased almost 60% of their own advertisement budget in just sapphire.

[0]
[http://www.sec.gov/Archives/edgar/data/320193/00011931251244...](http://www.sec.gov/Archives/edgar/data/320193/000119312512444068/d411355d10k.htm)
("Advertising costs are expensed as incurred. Advertising expense was $1.0
billion, $933 million and $691 million for 2012, 2011 and 2010,
respectively.")

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sytelus
What is cool about this is how much of technology required for all little tiny
parts of modern devices. Who knew a camera lens is made up of Sapphire? I
wonder how many elements from periodic tables would be checked off when making
an iPhone. Just thinking about this, there were probably 100s of innovations
just to mine and purify and machine sapphire in past 100s of years so that in
2000s we can finally produce acceptable quality tiny camera lens. Same thing
goes for Gorilla glass, motion sensors and so on. I would probably bet that if
we needed to make a document that describes every technology required to make
an iPhone starting from how to make a fire so that a caveman can follow it by
the line and produce an iPhone, it would probably a 100 million pages.

~~~
micampe
On that vein, an essay on how _a pencil_ is made:
[http://www.econlib.org/library/Essays/rdPncl1.html](http://www.econlib.org/library/Essays/rdPncl1.html)

 _«I, Pencil, simple though I appear to be, merit your wonder and awe, a claim
I shall attempt to prove. In fact, if you can understand me—no, that 's too
much to ask of anyone—if you can become aware of the miraculousness which I
symbolize, you can help save the freedom mankind is so unhappily losing. I
have a profound lesson to teach. And I can teach this lesson better than can
an automobile or an airplane or a mechanical dishwasher because—well, because
I am seemingly so simple.

Simple? Yet, not a single person on the face of this earth knows how to make
me. This sounds fantastic, doesn't it? Especially when it is realized that
there are about one and one-half billion of my kind produced in the U.S.A.
each year.»_

~~~
mbreese
Except that essay doesn't tell you how to actually make a pencil... it tells
you how to make a market where the components of a pencil could be bought.

I think it would be more interesting (well, unless you're an economist) to
describe the composition of the various parts of the pencil, how they are
formed, and ultimately how the pencil is physically manufactured.

Then again, I also like watching How It's Made.

~~~
erichocean
_it tells you how to make a market where the components of a pencil could be
bought_

As I recall, the point of the essay is that you simply _can 't_ make a
"market" that would produce a pencil at all. No one can. It happens
organically, or not at all.

The strength of markets is that they are self-organizing to a large degree
(given the right conditions, e.g. political stability and preservation of
capital), and that the sum is greater that the parts—in the essay, the 'sum'
being the pencil, which no single organization (or government) can produce on
it's own.

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dl_terp
I think this is very similar to the creator of liquid soap. He knew that no
patent could keep this out of his competitors' hands so he bought out
essentially every pump liquid dispenser bottle maker.

Looking ahead to see where the need is going to be (not where it is) is an old
trick which has withstood the test of time.

"I skate to where the puck is going to be, not where it has been." Wayne
Gretzky

~~~
thaumasiotes
This seems a little more like investing heavily in a company that manufactures
pump-dispense bottles. It's hard to see how it could _reduce_ availability.

~~~
masklinn
By investing heavily in the company they lock in an exclusivity contract. They
essentially buy _all_ the production capacity of the only significant
producer.

In increases global availability, but all that availability is going to them,
so everybody else sees reduced availability.

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quellhorst
Could it just be that apple is going to make a watch and will use sapphire
crystal for the watch faces? This is already very common on watches.

~~~
danielsju6
This was my immediate thought as well.

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colinbartlett
At _least_ $578M. Because they made a $578M downpayment toward an unknown
future quantity and value of sapphire over the next 5 years.

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oneiric
I thought the capital 'S' "Sapphire" referred to a company. A lowercase 's'
would clarify that (title grammar conventions aside).

~~~
sethhochberg
In particular, Sapphire Technology is a major manufacturer of AMD GPUs. That
would have been _very_ interesting.

[http://www.sapphiretech.com](http://www.sapphiretech.com)

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analog31
So far as I know, sapphire is also used as a substrate for growing some kinds
of semiconductors. Here, the optical clarity isn't as important as the
chemical purity, but clarity and purity go hand in hand for sapphire.

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BadassFractal
This was the obvious next step for touch-based devices. Sapphire production
seems to have gotten really affordable recently, and Gorilla Glass never truly
delivered shatter protection, mostly scratch protection.

The Ubuntu Edge was going to be the (possibly?) first phone to offer a
sapphire, so it's good to see others pick up the idea as well.

~~~
Osmium
> Gorilla Glass never truly delivered shatter protection, mostly scratch
> protection

Sapphire will certainly offer more scratch resistance, but I'd be more
skeptical about shatter resistance for now...

~~~
jandrewrogers
No reason to be skeptical. Sapphire is commonly used as a high-end alternative
for bulletproof glass in armored vehicles. While it is a lot more expensive
than bulletproof glass it is also much more resistant to weapons fire, which
suggests its durability.

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salem
Anecdotally, I also heard today that synthetic sapphire/ruby gems have become
difficult for jewelers to source. Maybe someone (Apple?) is already soaking up
higher purity raw materials for sapphire production.

~~~
reeses
It's always difficult, especially for smaller jewelers in the US. We were
lucky for several years with sapphire production, allowing us to have sapphire
crystals and display backs in watches for very low prices. Pivots have started
to move up in price, enough that it's almost worthwhile to do your own bushing
(which is fun anyway).

Now you're seeing "mineral glass" back on the upswing in lower priced watches.

Leica started using sapphire for the cover on its displays on the M9p and M8.2
cameras a few years ago, so I'm sure that general industrial consumption has
increased among manufacturers producing long-lived products with LCD displays
in dusty/sandy/etc. environments.

~~~
horsemouth
the second i saw the article title my first thought was watches as sapphire is
used for both for the crystal and the pivots.

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nielsbot
I thought sapphire was much more brittle than glass, so more prone to
shattering. Does someone here know if that's true? Would it be a problem for
iPhone/iPad sized pieces?

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craigyk
not much more, and more brittle than gorilla glass which isn't regular 'ole
glass IMO. Way way more scratch resistant though, so again IMO, totally worth
the tradeoff if price isn't a factor.

~~~
arrrg
For larger displays being shatterproof seems like the more important problem
to me. Scratches are already hardly a problem with glass (I get the impression
that tiny sharp rocks are pretty much the only thing that can cause problems
in the environment those displays are usually in, so to avoid most scratches
one has only to avoid laying the display face-first on some dirty/hard surface
and sliding it around) and even then a few scratches are not as much a problem
as a shattered screen. Shattering is much more fatal to the device and it
often only takes one or two drops and the glass shatters.

Being absolutely scratch resistant is a desirable property for a camera lens
(which is also much, much smaller and thus much less likely to shatter). It
doesn’t seem like such a desirable property and good tradeoff for screens, at
least not as long it isn’t as shatterproof as the best glass.

In many ways I tend to think that scratches are a solved problem on mobile
devices. Current glass is good enough. Shattering is not. (I’m not gentle to
my devices but my 18 month old iPad has practically no scratches. Some are
faintly visible if you look at it from certain weird angles. However, the
glass of my previous iPad did shatter from a 1 meter or so fall of the edge of
the device on tiles. Also, I see people using phones with shattered screens
all the time. It seems to be a quite common occurrence.)

Yeah, improving scratch-resistance further would be awesome, but only if there
is no trade-off with being shatterproof.

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lostlogin
If scratch resistance could be greater it would be very useful. My screen on
my older phone has some deep scratches from keys in my pocket - something I
now avoid - and hard labour. Smashing concrete, heavy lifting etc when you
have a phone in your pocket is brutal on phones. Its a terrible environment
for a phone, but I try to get stuff done even when on call. I have checked the
screen on a builder I know too, and he has scratches too.

~~~
arrrg
What phone is that? Maybe it has a plastic screen, those get scratched easily.

In my experience metal is typically much too soft to cause any damage to the
glass. If anything can cause damage it’s sand and the like (but it has to
really press up against the screen). So, yeah, in an environment with a lot of
that stuff glass screens will get scratched. However, it’s not like that’s a
common environment for phones to be in.

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lostlogin
Iphone 4. My new phone will be treated a little better!

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specialist
Is it practical to make eyewear (glasses) lenses from sapphire?

I'm brutal on my glasses. I'd happily pay for tougher lenses. Though I did see
mention that the failure mode for sapphire is lots of shards flying. So maybe
I'll wait.

~~~
masklinn
> Is it practical to make eyewear (glasses) lenses from sapphire?

They would be way heavier than good polyc lenses, yet more expensive than
basic (heavy) glass. I doubt there's much of a market, but might have more
luck/info asking manufacturers directly (essilor, leitz, nikon, zeiss, ...)

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hcarvalhoalves
Can it be used on more than screens and lenses?

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threeseed
It's used on the TouchID button.

And it's quite likely that TouchID will be rolled out to the iPad, iPad Mini
and quite possibly the MacBooks.

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stesch
My watch has sapphire glass. It is a few years old and not a single scratch is
visible.

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alex_doom
I look forward to my phone screens breaking less.

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loceng
It worries me as to what Apple will be doing with this Sapphire. Anyone have
any insights about this?

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chrisoverzero
They're going to use it to build city-destroying lasers, and hold world
capitals for ransom. Wielding such destructive power from its new "spaceship"
campus, Apple will make the entire Earth into a walled garden.

They're going to build consumer electronics with it, of course. What is
possibly worrying about that?

~~~
loceng
Thanks for the laugh.

There's too much to explain what it could be used for instead. All in time
we'll all find out.

