Corning shares slide after rival inks Apple deal

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NEW YORK (AP) - Shares of Corning Inc. slid on Tuesday after GT Advanced Technologies Inc. announced that it signed a deal with Apple Inc. for sapphire material. The supply agreement worried investors that the iPhone maker will replace Corning's Gorilla Glass with sapphire for its gadget screens.

GT Advanced's shares soared. The company said Monday that it signed a multi-year deal supply with Cupertino, Calif.-based Apple for the material, which it will produce at an Apple facility in Arizona. GT expects revenue next year of $600 million and $800 million, with up to 80 percent of sales coming from its sapphire segment.

Sterne Agee analyst Andrew Huang said the deal "increases the likelihood that Apple will replace Gorilla Glass with sapphire, which would be a marginal negative for Corning." He noted that Corning supplies Gorilla Glass for many other phone, tablet and notebook computer makers besides Apple.

Corning spokesman Daniel Collins declined to comment on the Apple-GT deal, but he said that "we do not believe that sapphire will gain a significant volume of the cover glass market."

"Sapphire weighs more than Gorilla Glass, about 1.6 times more and there are significant questions if it can be produced at the thinness necessary to compete with glass," Collins added in an email. "Our testing has shown that once sapphire is damaged, it is much more susceptible to breakage than Gorilla Glass."

Apple and GT declined to comment.

Shares of Corning, N.Y.-based Corning fell 75 cents, or 4.4 percent, to $16.51 in late afternoon trading. The stock has traded in the 52-week range of $10.71 and $18.07. Shares of Merrimack, N.H.-based GT Advanced shot up 21 percent to $10.11, setting a new 2-year high earlier Tuesday of $10.60.