Get Ready for an Unbreakable Apple iPhone

Apple (AAPL) was granted a patent yesterday for a “protective mechanism for an electronic device.” Like most patents, this one sounds pretty generic and boring. But like other Apple patents, it becomes a lot more interesting when you get into the details.

Apple iPhone may not need iPhone cases any more
Source: Griffin

Consider this: Apple has come up with a technology to make your iPhone fall smarter. Sensors in the iPhone would work in combination with the vibration motor to detect that the device had been dropped and then adjust its orientation to minimize damage on impact.

Or as Gizmodo’s Adam Clark Estes put it, “It would make your iPhone fall like a cat.”

Bad News for Accessory Makers?

That’s potentially great news for consumers, but it could have a negative impact on sales at companies that make cases and other accessories to protect iPhones.

Right now, the consequences of dropping an Apple iPhone can be expensive. A cracked display — the most common result of a drop — will set you back anywhere from $109 to $129 plus shipping (or a trip to the Genius Bar). If other components are damaged, the out-of-warranty bill for an iPhone 6 will quickly hit the $299 level.

Of course, Apple isn’t alone here. Break a Samsung (SSNLF) Galaxy S5, or any other smartphone, and it’s going to cost you.

It’s no wonder that accessory makers like Logitech (LOGI), Griffin and Zagg (ZAGG) have turned iPhone cases and screen protectors into a multibillion dollar business. In 2012, CNN said the Apple iPhone accounted for nearly 29% of a global smartphone accessories market worth $20.8 billion. The average smartphone user was spending $56 on accessories per device and 75% of all iPhones sold would eventually be protected by iPhone cases.

“Unbreakable” Could Become a Premium Feature

Despite a declining share of the global smartphone market (now down to below 13% of all smartphones sold), the Apple iPhone has remained firmly in the premium category. The closest it’s come to the “cheap” smartphone analysts were hoping to see for the Chinese market was the $549 iPhone 5c. Rather than boosting sales by offering a discounted iPhone, the strategy has been to appeal to well-heeled consumers with innovative features like Touch ID and high quality design.

Apple’s interest in scratch-proof Sapphire glass to cover its iPhone displays didn’t die with GT Advanced Technologies (GTAT) — it’s just on hold. Combine Sapphire glass with the latest Apple patent and you could get an Apple iPhone that comes awfully close to being unbreakable.

That would represent a huge competitive advantage — one that could increase sales by appealing to buyers of other flagship smartphones. Even if iOS isn’t enough to sway people from buying an Android, not having to slap a case on your new smartphone might be the carrot that convinces them to switch to an iPhone.

Just imagine the marketing material: A glamor shot of the latest Apple iPhone — all gleaming metal, glass and high fashion design. No case obscuring all of that attention to detail or the gold finish. Beside it, a Samsung Galaxy — bulkier, heavier and barely recognizable under the plastic armor of a protective case.

Durability could be an advantage for Apple in the enterprise market. Employees who are issued corporate smartphones can be tough on them — who cares about dropping your phone if your company is going to foot the repair bill or replace it? An Apple iPhone that survives most drops would cut down on IT costs.

Many Apple patents come to nothing. Some are merely preemptive (to prevent the competition from using the feature), while others are simply impractical.

That means there’s no guarantee we’ll ever see an iPhone that falls like a cat. However, if it were ever released, an “unbreakable” Apple iPhone wouldn’t just be bad news for companies that sell protective iPhone cases, it could spell bad news for other smartphone makers as well.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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