Invest In The Best of Both Worlds: Historically Rooted, Futuristically Flexible…
Last Thursday, I talked about Leap Motion. It’s a new technology that could make the mouse, trackpad and/or keyboard you’re probably using right now obsolete.
Informed Sleuthers know that disruptive technologies like Leap Motion have the highest growth opportunity. Not only can they absorb market share from the products and services they disrupt, but they create entirely new markets. The problem is that they’re difficult to predict. After all, little to no past performance market research on the newest technologies really exists.
The catch with Leap Motion is that it’s been developed by a private company, so there’s no easy investment strategy I can offer you. But the last thing I’d ever want to do is leave you empty-handed…
So I’ve asked Ray Blanco to give you a detailed report — for free — on one company he’s investigated. This company also has technology with disruptive capabilities currently riding the television, computer, smartphone, tablet markets… and then some.
As he explains further down below, “Every year, the company files hundreds of new patents, and new products account for more than 90% of its sales”…
Ray’s going to show you how this company has a proven ability to consistently adapt in the marketplace and, what’s especially reassuring, how it has an unusually long history of doing so.
Sincerely,
Josh Grasmick
Editor, Agora Financial
A Legendary American Company With a Clear FutureCorning Inc. (NYSE:GLW) introduced a new glass useful in the lanterns necessary in the rapidly growing railroad industry — the transformational transportation technology of its time. Corning’s innovation in new types of glass enabled other transformational industries to get off their feet as well.
In 1879, for example, Thomas Edison needed a glass that could meet the needs for his light bulbs. He called on Corning to make the glass bulbs. By 1900, light bulbs accounted for half of Corning’s revenues. Corning not only developed a suitable form of glass for light bulbs and produced them with consistent quality; it also later invented a new glass manufacturing technology.
The invention, called the ribbon machine, would take glass manufacturing from an expensive, manual affair to industrial mass production. Glass blowers could turn out only a few bulbs an hour. Ribbon machines turned out thousands.
The ribbon machine uses a continuous glass ribbon, which is heated and blown into bulbs by air nozzles. The result is a light bulb inexpensive enough to be available to anyone, and the basic technology is still in use today. It is no exaggeration to say that Corning helped light up the world.
This same technology would enable the mass production of vacuum tubes, without which the emerging electronics industry would never have left the ground. Corning glass enabled the first consumer radios, and, along with further innovations, would become a key enabler for the large picture tube required by the first television sets.
It didn’t stop there, however. In 1970, the company developed a glass fiber that was flexible and could be used to transmit data with light over long distances. Today, the globe is traversed by millions of miles of fiber-optic cables carrying vast amounts of voice and data. Corning’s invention made the modern Internet possible.
More recently, Corning’s glass prowess has enabled new tech booms. In 2006, for example, Apple’s Steve Jobs was caught in a search for a display material that would allow his company to launch the revolutionary iPhone.
Jobs had tested many different materials and nothing seemed to work. Ordinary glass or plastic was too fragile. The screens on iPhone prototypes would scratch when kept in Jobs’ pocket. After communicating with Corning, Jobs found that the company had already developed a tough, scratch-resistant glass suitable for use in smartphone displays.
Corning called it Gorilla Glass, and the iPhone became one of the most-important product launches in consumer electronics history. On the day the original iPhone launched, Jobs sent a message to Wendell Weeks, Corning’s CEO: “We couldn’t have done it without you.”
Corning’s focus on research and development has kept it a going concern since before Lincoln was president, and the company has remained true to its roots. It is still innovating new glass technologies and spends 10% of its revenues on research and development. Every year, the company files hundreds of new patents, and new products account for more than 90% of its sales.
I visited Corning’s booth with Patrick Cox while at the Consumer Electronics Show (CES) earlier this year, and company representatives showed me a new form of Gorilla Glass that is thinner and more flexible than the original. It is already used in the latest tech products, like the Samsung Galaxy line of smartphones, and is so tough I’ve seen videos of smartphone screens used to hammer nails emerging unscathed.
Corning’s latest glass technology is ideal for use in OLED displays. The light-emitting layers of OLED screens must be protected against the atmosphere, because moisture and oxygen degrade the organic display chemicals. To improve OLED display glass, Corning has partnered with Samsung, the world’s largest OLED display manufacturer, to develop and manufacture new high-tech glass.
One new glass, called Lotus Glass, can withstand heat better than other types of glass, which improves yields when manufacturing OLED displays. The improved heat resistance will also allow Samsung to produce higher-performance screens.
Corning’s Latest Breakthroughs
A Corning representative, however, told me that Corning was also working on “new things” he wasn’t free to disclose. As it turns out, one of those new things is a type of glass called Willow Glass, which was recently announced by the company.
Willow Glass is so flexible it can be wrapped around a structure. Its flexibility can help enable new kinds of touch displays, such as curved automobile dashboards or appliance interfaces. However, unlike plastic, which is also flexible, it can withstand high manufacturing temperatures. There is, however, another huge advantage to Willow Glass, and it involves lowering manufacturing costs.
Back in Benjamin Franklin’s day, the press operator had to load a new sheet of paper for every page he printed. Of course, the invention of rotary printing presses, using rolls of paper, changed all that, and dramatically lowered the price of books, newspapers and magazines. Output from a single press went from a few thousand to millions of copies of a page per day.
Willow Glass has the potential to do for display manufacturing what the rotary press did for book printing. This invention reminds me of the way Corning transformed glass manufacturing with its invention of the ribbon machine in 1926. Willow glass is flexible enough to be produced in rolls, enabling increased production and lowered manufacturing costs. With Willow Glass, new displays can be “printed” on glass at high speeds and cut into individual “pages” later. This is a holy grail of display manufacturing.
Furthermore, Willow Glass is only a fraction of the thickness of currently available display glass — anywhere from 10-20% as thin. It is literally as thin as a sheet of paper. This gives Corning a major competitive advantage over other display glass manufacturers.
Corning is also the global market leader in the optical fiber industry. With the appetite for bandwidth growing in the U.S. from online video, as well as data-hungry mobile devices, the demand for new fiber-optic cabling is strong.
Due to increased bandwidth requirements for homes and businesses, Internet service providers are rolling out fiber links directly to the home all across the country and the trend is expected to continue. In 2007, Corning developed a new fiber-optic cable technology called ClearCurve. Ordinary fiber-optic glass suffers from signal degradation if bent through a sharp curve. ClearCurve optical fibers, however, are able to bend far more than conventional fiber, which makes it ideal for fiber-to-the-premises applications.
New Internet-enabled televisions through Google and Apple TV will only drive bandwidth demand further. Skyrocketing mobile data use is exposing the weak links in mobile networks, and many cell sites are moving away from copper links to fiber-optic connections where feasible.
Today, Corning makes everything from lab glass to cell culture solutions and drug-screening systems. The drug-screening system, called Epic, uses optical technology to monitor the behavior of cells, as well as the detection of small molecules. This part of why the company is enjoying double-digit annual growth rates.
In environmental and energy applications, Corning glass technology is a leader in glass filters used to clean vehicle exhausts. It has recently expanded capacity in China, the world’s largest automotive market. The growing Chinese automotive market, combined with stricter emissions regulations, will help drive demand for Corning technology.
Corning has also developed new glass for photovoltaic applications. The company claims a 20-30% improvement in efficiency for thin-film solar panels with a glass that is stronger than conventional photovoltaic glass yet 50% thinner. Corning’s foray into solar power technology achieved its first commercial order earlier this year.
In 2011, display manufacturers overestimated demand for flat-screen displays, resulting in an oversupply of glass. Excessive inventories hurt sales and margins for suppliers like Corning. A temporary slowdown in the display glass industry has hurt Corning’s earnings and share price in the short term, but the long-term trend in display technology is unchanged.
Furthermore, there is the company’s strong participation in OLED display glass — the fastest-growing display technology. OLED display manufacturers are also exploring designs using two sheets of glass (in displays, the back sheet is often made of metal), due to superior hermetic sealing. There is a potential here for Corning to increase per unit glass sales.
Last but not least, the innovative new Willow Glass creates the opportunity for Corning to completely disrupt display manufacturing technology as we know it. If Willow Glass adoption plays out as I hope, the upside for Corning will be huge.
Ad lucrum per scientia (toward wealth through science),
Ray Blanco
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Ray Blanco
Growing up, I'll bet you knew a kid like Ray. When Ray was 10, he was the eccentric kid that spent hours in his room every night, typing programming code into his Timex Sinclair 1000. By eighth grade, while most other kids were outside knocking a baseball around, Ray was in his basement figuring out how to build what's called a "Wilson Cloud Chamber" -- a supercooled device for detecting particles of ionizing radiation. From there to advanced robotics and avionics... genomics and biotechnology... getting smarter was his idea of fun. And now he's combined his passion for technology with financial and stock market expertise. Ray is the co-editor of Technology Profits Confidential.
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