May 20, 2016 1:15 am JST

New iPhone to have glass casing, says key supplier to Apple

CHENG TING-FANG, Nikkei staff writer

The current iPhone models have metal casings.

TAINAN, Taiwan -- Apple Inc. has decided that it will change iPhone casings from metal to glass to differentiate itself in the saturated global smartphone market in 2017, according to Allen Horng, chairman and chief executive of Catcher Technology, a key supplier.

There has been media speculation that the Taiwanese metal casing maker will lose Apple business next year to China's Biel Crystal Manufactory and Lens Technology, which already supplies glass screen covers for iPhones.

"As far as I know, only one [iPhone] model will adopt glass casing next year," Horng told reporters after the annual shareholder meeting on Thursday. "I don't think this move will have an impact on Catcher's revenue as glass casing still needs a durable metal frame which requires advanced processing technology and would not be cheaper than the current model."

Horng said there will be no Apple handsets using glass-only casings without metal frames next year. 

Apple contributed over 33% of Catcher's revenue of $82.41 billion New Taiwan dollars ($2.5 billion) for 2015. Hewlett-Packard and Dell are the company's second and third most important customers contributing 20% and 15% respectively.

Catcher is now deciding whether to supply smartphone makers in China to mitigate the risk of Apple's move to glass casings. Horng said that company is in talks with several companies in China but has not decided yet whether to take orders.

One reason for Apple to phase in glass casings is pressure on Chief Executive Tim Cook to improve sales by making iPhones more distinctive, according to Jeff Pu, an analyst at Yuanta Investment Consulting.

"Apple's decision would definitely hurt Catcher while giving a major boost to Biel Crystal Manufactory and Lens Technology," said Pu.

For the three months ending in March, Catcher's net profit fell 10.6% to NT$4.15 billion and its revenue slid 3.2% to NT$16.84 billion amid weakening demand for high-end smartphones. In April, its revenue continued to decline, falling nearly 15% year on year to NT$6 billion.

Horng said that while Catcher will suffer a year-on-year decline in the first half, it will enjoy a healthy rebound in the second half of 2016. 

Asia300

Catcher Technology Co. Ltd.

Taiwan

Market(Ticker): TAI(2474)
Sector:
Industry:
Producer Manufacturing
Metal Fabrication
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