Flaws: Why Gorilla Glass Is Best for Mobile Devices

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July 29 (Bloomberg) -- Corning CFO James Flaws discusses the demand for Gorilla Glass with Alix Steel on "Street Smart." (Source: Bloomberg)

Declining gorilla glass sales in terms of the overall smartphone demand?

Really in second quarter we had a great quarter with shares up 16%. we did miss consensus by a penny.

It related to the smartphone demand for gorilla class.

It was not that large in terms of corning overall.

The biggest change was the tablet outlook for the second half of the year.

Clearly they were weaker in the second half of the year.

I want to correct myself.

I called you the ceo.

You are the cfo of corning.

That is the reason why you solve the decline in sales for this quarter.

How are you competing?

We are launching a new version of gorilla class this fall.

It is already in production and will be designed into some models.

We actually continue to believe it is the best product for smart phones and tablets.

Gorilla class is much less expensive and center, ways less and transmits more light.

He continued to be quite encouraged by gorilla and think it will be the coveted material of choice.

It does seem like safed -- seem like it is catching on.

Are you going to offer any more incentives in order to keep up with customers?

We do not think so.

We think gorilla glass will win its fair share of cover phones.

It is already on some watches and will continue to be on tablets, particularly driven by cost.

Safire is about 10 times the cost of gorilla so we think that really matters for consumer electronics.

L in terms of last quarter it was managing demand.

Owing forward, the new iphone coming out in september.

What does that wind up doing to your orders?

I cannot comment on specific customers but we are looking for a strong back half of the year with several smartphone model launches from a number of customers.

We will be shipping a new version of gorilla glass that will be on some phones and we think tablets will be pretty much flat in the back half of the year.

I would like to emphasize the other businesses, which are far larger, for example the lcd business where we see great volume, up 11% this past quarter.

We are seeing much lower price declines than we have seen over the past couple of quarters.

The profitability from that business is really helping.

What was the reason for that?

We think that our competition is definitely hurting with lower profitability.

We think our product remains the product of choice in the lcd business.

And we are seeing good television demand around the world.

World cup helped in the second quarter.

I.t. products, laptops are up this year versus being down the past couple of years.

We are seeing great business in the display area.

The other businesses, telecom and environmental, each had sales up or team-25% respectively.

-- up 14% and 25% respectively.

In terms of r&d, making him nine percent of the revenue, which is lower than some other tech companies out there like ibm.

As competition continues to increase, will you be raising that at all?

I think we will day at the same percentage of sales.

R&d will grow as sales growth but we are quite comfortable with the amount we are spending.

We have a balance what we spent to support new things in existing businesses.

For example, new filters are coming in in the automotive business, as well as your last competition, for example, flexible glass for cover glass.

So we are comfortable with the amount we are spending as a percentage of sales.

So what keeps you up at night then?

Well, we always worry about competition and things like foreign exchange.

But right now i would say things are going remarkably well at corning.

The only blip in the horizon was lowering tablet sales of little bit.

Every other businesses doing correct -- terrific.

Thank you for joining us, cfo of warning.

This text has been automatically generated. It may not be 100% accurate.

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