According to IHS, smartphones continue to lead total area demand in the cover glass market; however, as the markets for smartphones and tablets mature, cover glass industry revenue growth is declining from 39% Y/Y in 2013 to 11% in 2015. While cover glass market growth is falling overall, increasing popularity of the Apple Watch is leading to growth in smart watch cover glass shipments.
“Although the average display size for tablets is increasing, simpler industrial design and weak device demand are causing average selling prices for cover glass to fall quickly,” according to Terry Yu, senior analyst for small and medium displays for IHS. “Cover glass makers are now pinning hopes on smart watches as a way to support weakening revenue growth caused by the maturation of the smartphone and tablet segments.”
Smartphones are forecast to have a 55% share of cover glass demand by area in 2015. Changing requirements for smartphone cover glass—including increased use of aluminosilicate glass—are increasing average selling prices (ASPs), so smartphone cover glass is expected to have a 63% share of revenues in 2015. By way of comparison, tablet cover glass is expected to reach a 29% share of cover glass demand by area in 2015, but will only contribute 25% of cover glass revenue, according to the most recent Touch Panel Cover Glass Report from IHS.
Due largely to consumer demand for the Apple Watch, overall smart watch cover glass area demand is forecast to increase five-fold in 2015, reaching 33K m2. That is still only 0.1% of total cover glass by area, as cover glasses for wearable devices are much smaller than those used in smartphones and tablet PCs. The slightly curved design known as 2.5D, along with higher penetration of sapphire glass, will keep ASPs significantly higher, which will help smart watch cover glass revenue share rise to 3% of the total market in 2015.
Higher costs for aluminosilicate glass and sapphire glass can significantly affect cover glass costs. In fact, sapphire glass material costs in smart watches can be up to 12 times higher than the cost of aluminosilicate glass.
“Sapphire glass used in wearable devices commands a premium price, so growth in that material would support industry revenues,” Yu said. “Sapphire glass is already used in the traditional watch industry, which makes it easier to adopt by smart watch cover glass manufacturers.”
