With screen sizes increasing, 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 percent year over year in 2013 to 11 percent in 2015. While the overall cover glass market growth is falling, the increasing popularity of the Apple Watch is leading to growth in smart watch cover glass shipments, according to IHS Inc., the leading global source of critical information and insight.
“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 shore up flagging revenue growth caused by the maturation of the smartphone and tablet segments.”
Smartphones are forecast to comprise more than half (55 percent) of all cover glass area demand in 2015, followed by tablet PCs. More complicated requirements for smartphone cover glass — including higher aluminosilicate glass penetration, more drilling holes and more ink layers — are causing average selling prices (ASPs) to rise faster than area demand; smartphone cover glass is therefore expected to make up 63 percent of revenues in 2015. By way of comparison, tablet cover glass is expected to reach 29 percent share of total area demand in 2015, but will only comprise 25 percent of all cover glass revenue, according to the most recent Touch Panel Cover Glass Report from IHS.
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Due largely to consumer demand for the Apple Watch, overall smart watch cover glass area demand is forecast to increase by five-fold in 2015, reaching 33,000 square meters. That is still only a tenth of a percent of total cover glass area shipments, as cover glass displays 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 sapphire glass penetration, will keep ASPs significantly higher, which will help smart watch cover glass revenue share rise to 3 percent of the total market in 2015.
Higher costs for aluminosilicate glass and sapphire glass can significantly affect total 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 area would help shore up industry revenues,” Yu said. “In addition, sapphire glass is already used in the traditional watch industry, which makes it easier to adopt by smart watch cover glass manufacturers.”
Note that this market analysis from IHS covers only front cover glass, and does not include glass used in rear covers, such as the Gorilla glass used on the back of the Galaxy S6.