Corning‘s (NYSE:GLW) Gorilla Glass is a market leading cover glass for smartphones and tablets that prevents the touchscreen of these devices from scratches and other damages from everyday use. Since its launch in 2007, sales of Gorilla Glass have risen sharply driven by its adoption on several smartphones and tablets to cross $1 billion in annual sales last year. Now, with the emergence of touch on laptops, there is a need for cover glass on touch-enabled laptops. To corner this emerging market, Corning recently launched Gorilla Glass NBT for cover glass application on laptop screens. This newly launched glass brings the scratch and other damage resistance benefits of Gorilla Glass to laptops and driven by the emerging trend of touch on laptops, this glass can drive the next stage of growth in Gorilla Glass’ sales in the coming years.
We currently have a stock price estimate of $15.50 for Corning, around 5% ahead of its current market price.
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Advantages Of Gorilla Glass NBT
Corning says that Gorilla Glass NBT offers 8 to 10 times higher scratch resistance than the standard soda-lime glass which is used in laptop screens. With the extensive gripping, tapping and swiping that comes with a touchscreen, the soda-lime glass screen is prone to breakage. The cost of replacing a broken laptop screen is also significant – upwards of a hundred dollars. Gorilla Glass NBT at 1%-2% of a laptop’s retail price can provide the additional damage resistance that is required for touchscreens.  Apart from scratch resistance, this cover glass also provides the laptop touchscreen with increased ability to withstand accidental bumps. This property prevents damage in case the laptop screen is closed on an object.
Gorilla Glass NBT Will Likely Drive Future Sales Growth
Dell has confirmed its plans to adopt the Gorilla Glass NBT on its touch-enabled laptops which it will launch this fall. Additionally, like in the case of smartphones and tablets, other manufacturers will likely follow suit given the cost-effective advantages that this cover glass offers to a touchscreen. Corning estimates that in the next few years the cover glass market for touch-enabled laptops has the potential to become as large as the one for smartphones and tablets. If this were to happen then the strong sales growth rates that we’ve seen for Gorilla Glass during the past five years will continue in the coming years. Gorilla Glass is a part of Corning’s Specialty Materials segment, which constituted 14% of its revenues in the first half of 2013. 
Additionally, this growth in sales from Gorilla Glass NBT will help Corning’s results, which have been impacted in recent quarters by LCD price declines. Last quarter, the company faced LCD price declines in the range of 2%-3% and in the current quarter it anticipates to face similar LCD price declines. Looking ahead, even though the company’s LCD business is moving towards stabilization, growth in its results will be driven by Gorilla Glass on rising unit sales of smartphones/tablets and the emerging trend of touch on laptops.Notes:
- Corning Brings Gorilla® Glass NBT™ to Touch-Enabled Notebooks, July 29 2013, www.corning.com [↩]
- Corning’s Q2 2013 10-Q, July 31 2013, www.corning.com [↩]