Apple Inc. (AAPL) vs. Samsung and the Flexible Screen: Corning Incorporated (GLW)

Enter Youm
Here is where the bad news for Apple begins. At this year’s Consumer Electronics Show, Sumsung introduced flexible OLED technology that was dubbed Youm. The product was exhibited on a Windows phone. The inclusion of Microsoft Corporation (NASDAQ:MSFT) led to a significant amount of speculation that Samsung’s first release of Youm will be with Microsoft and not on a Google Android smartphone. While other companies — perhaps Apple — are working on OLED technology, Samsung is believed to be well ahead of its competitors. Even if a Windows phone is the first to receive an OLED display, there is further speculation that the Galaxy S IV — a revamp of the popular Galaxy S III — will also receive this type of display.

The language offered by Corning seems to make clear that the glass is designed to be used over OLED technology. While Apple is a Corning customer, there is no exclusive relationship between the companies. Where things get less rosy for Apple, and more confusing, is in the fact that Samsung is believed to control roughly 90% of the OLED market. While Samsung could certainly accept Apple as a customer for its OLED business, it would seem that with a product that is potentially this advanced, selling to the company’s top rival unlikely.

Sorting it all out
If you are confused, I think you are likely in good company. To simplify, the implication of the Bilton article in the Times is that as a result of the perfection of Willow Glass, Apple will now be able to manufacture bendable devices that will foster its efforts in wearable computing, specifically in the wristwatch form factor. In reality, Corning’s Willow Glass alone is not enough to create a flexible device — the underlying OLED or other display technology must also be flexible. While no hard data is available, Samsung is believed to control this market. The logical conclusion is that Samsung and not Apple is poised to push the envelope and introduce a new wave of wearable or flexible products.

While the news is great for Corning — its product will likely be a necessary element — Samsung is also in good shape, as is Google, which provides Android to many top-selling Samsung smartphones. Unfortunately, Apple looks like the big loser of the group, unless Samsung inexplicitly sells OLEDs to its main competitor from Cupertino or it solves the issues by itself. In any event, Corning looks like a buy on the news, with Google waiting on a big catalyst to come out of the story.

The article Apple vs. Samsung and the Flexible Screen originally appeared on Fool.com and is written by Doug Ehrman.

Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool recommends Apple, Corning, and Google. The Motley Fool owns shares of Apple, Corning, Google, and Microsoft.

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