Sun, May 14, 2017 - Page 16 News List

Apple gives US$200m for phone glass

LOOKING FORWARD:The investment in Corning points to a partnership between the two companies to develop other, unforeseen uses for the glass, a consultant said

NY Times News Service, SAN FRANCISCO

Apple Inc is seeding the next generation of US-made glass for its iPhones and iPads, and its investments might have the side benefit of helping the company win favor in Washington.

Apple on Friday announced that it was giving US$200 million to Corning Inc, which makes the tough, scratch-resistant face for every iPhone and iPad, to support the glass maker’s efforts to develop and build more sophisticated products at its factory in Harrodsburg, Kentucky.

Corning has made the glass for every iPhone since the original 10 years ago.

Apple’s investment, the first from the technology giant’s US$1 billion fund to promote advanced US manufacturing, would help Corning develop thinner, more versatile glass for iPhones as well as other product lines that Apple is exploring, such as screens for self-driving cars and augmented reality glasses.

The move goes beyond Apple’s traditional practice of subsidizing suppliers, said Tim Bajarin, president of the technology consulting firm Creative Strategies.

“I would see this more as an Apple-Corning partnership to flesh out what other kinds of things you would use glass for,” he said. “They are literally thinking about stuff you and I aren’t thinking about yet.”

The investment is also a goodwill gesture toward Republicans, including US President Donald Trump, who has criticized Apple for building its iPhones in China, and Senate Majority Leader Mitch McConnell, who represents Kentucky.

Apple said it spent US$50 billion last year with US suppliers, although it manufactures just one product line, the nearly obsolete Mac Pro, in the US.

Apple has accumulated more cash than any other company in the US — US$257 billion as of April 1 — and virtually all of it is stashed untaxed in foreign bank accounts.

Apple chief executive officer Tim Cook has repeatedly complained that US taxes are too high and has vowed not to bring the cash home until taxes are cut.

Last month, Trump sketched out a plan to slash overall corporate tax rates and perhaps offer companies a special break for bringing back profits held overseas.

Underscoring the political implications of the Apple-Corning deal, McConnell joined executives from the two companies at the formal announcement at the 65-year-old plant on Friday afternoon.

“Like millions of people around the world, the last thing I look at at night and the first thing I look at in the morning is my iPhone,” McConnell said. “Unlike millions of people around the world, I think of Harrodsburg, Kentucky, and this amazing Gorilla Glass that you guys make here.”

McConnell said there was a lot that Congress could do to help Corning and Apple be even more successful.

“We are going to try, through comprehensive tax reform, to make both of these corporations be in a better position to compete with other companies in other countries,” he said.

Apple chief operating officer Jeff Williams said that when Apple founder Steve Jobs showed a prototype of the first iPhone on stage in 2007, it had a hard plastic face.

Jobs complained that it scratched too easily in his pocket and ordered Williams to replace it with scratch-proof, shatter-resistant glass by the time the phone went on sale six months later.

Such glass did not exist except in the lab, but Corning scrambled to get it into production.

“It all happened here in Harrodsburg, and Apple owes you a big thank you,” Williams told the assembled workers.

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