No monkeying around
If you are like most smartphone owners, there is one event that haunts you: dropping the device and damaging the screen. Samsung and other device makers sought to ease this worry and looked to Corning Incorporated (NYSE:GLW) for help. Samsung’s S4 sports Gorilla Glass 3. Simply put, this screen is incredibly tough, with one tech blogger called it nearly invincible as he showed a photo of someone swiping it with a butter knife and leaving no scratches. The new glass technology is said to be three times more scratch resistant than previous versions. The Galaxy S4 is the first phone to use Gorilla Glass 3.
While landing the chance to protect Samsung’s devices with its Gorilla Glass is a major coup, I’m not sure how much revenues from this source will help Corning Incorporated (NYSE:GLW). Its growth and valuation numbers are troublesome. Last year, its earnings growth was -35%, and it is expected to be just 1.68% this year.
There is a threat too from another technology — sapphire — that is stronger than Gorilla Glass. However, the price of the stronger product is extreme, making it unfeasible for mobile device makers to use it and keep their margins in check.
For Corning Incorporated (NYSE:GLW), the fact that the price is too high – for now – is good, considering that its Gorilla Glass has become “an important cash cow for it in the past few years,” as noted by Fool Writer Evan Niu. Corning Incorporated (NYSE:GLW)’s specialty materials segment makes up 17% of it sales, which is up considerably up from the 6% of sales that the division accounted for back in 2009. When considering Corning Incorporated (NYSE:GLW) as an investment, keep in mind its vulnerability to others who threaten its popular screen technology.
Conclusion
Both Qualcomm and Corning Incorporated (NYSE:GLW) face increasing competition among mobile device manufacturers trying to improve, or even just maintain, their market share in the space. And while Samsung’s device is all the rage now, keep in mind how fickle consumers can be when it comes to long term commitments with their mobile devices. Recent reports from analysts say the Galaxy S4 sales are already showing signs of weakness.
Who knows who will be the next darling of the mobile device world, but one thing is certain. Corning and Qualcomm stand to continue to be successful if they innovate products that will help improve mobile devices.
The article Samsung Galaxy S4 Wouldn’t Be Great Without These U.S. Companies originally appeared on Fool.com.
Tedra DeSue has no position in any stocks mentioned. The Motley Fool recommends Corning. The Motley Fool owns shares of Corning and Qualcomm. Tedra is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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