High Sapphire Glass Costs Said to Limit 5.5-inch iPhone 6 Units to 10 Million

Chinese sources claim Apple will release a 5.5-inch iPhone model, but due to the use of high-cost, high-quality sapphire glass, the company will produce only 10 million units. The information was posted today on Weibo (via GforGames).

As you may have already read, Apple is expected to announce two new iPhone 6 models sometime this year. The rumour mill has been busy spilling information about an alleged 4.7-inch model, and we have seen a handful of high-resolution images of the “final version” iPhone 6 dummy. But there has been silence regarding 5.5-inch model rumours since the news broke that the handset had been postponed due to manufacturing issues. Up until today, that is.

The rumour seems to echo earlier reports claiming that Apple will use sapphire glass with the high-end 5.5-inch iPhone 6 only (although that report goes as far as claiming that Apple will drop the iPhone branding for that device).

Now, according to the Weibo post, sapphire glass will add another $280 to the final price of the iPhone, which would increase its price to $1285 in China. By comparison, the 64 GB iPhone 5s retails for $1106.

Fact is, sapphire glass is expensive, at least using the currently available manufacturing technology. That’s why recent Digitimes research concluded GT Advanced could supply only up to 11.6 million units of the forthcoming iPhone 6, which is questionable, since the Apple-GT Advanced deal was conceived to push down manufacturing costs.

We’ve contacted analyst Matt Margolis, who strongly contradicted what the Chinese rumours suggest. He expects the bill of materials for sapphire glass to be up to $15 per unit.

The total cost to Apple should be in the $11-15 range for the sapphire screens. I would argue that the 4.7″ would be closer to $11 and the 5.5″ would be closer to $15. The size alone is the main driver of price increase due to more material between the two iPhone 6 sizes.

GTAT should receive $8-10 per screens equivalent if they just grow and ship sapphire cores and the remaining costs of $3-5 will go towards the processing of the sapphire cores (slicing and finishing).

Finally, we may underscore that the iPhone 6 could become a more exclusive smartphone due to the sapphire glass, but we wonder if the price would go that high. Although we can’t exclude a price hike, since we’ve heard that Apple has been negotiating a possible $100 price hike with carriers.