A report citing "Taiwan supply chain insiders" states that yields have been too low, which is a problem that should be corrected once Apple's Mesa plant is operational. But an even bigger problem is that using the sapphire now would result in a price hike that would force consumers to dig deeper into their pockets to buy the phone.
On the other hand, the sources from Taiwan indicate that the sapphire glass will still be used on the much smaller screen on the Apple iWatch. The amount of sapphire required to produce the timepiece is much less than that required for Apple's iconic smartphone. Obviously, the cost of the material is much less an issue with the watch display.
The Apple iPhone 5s currently employs sapphire to protect the rear camera lens and the fingerprint sensor embedded in the home button. If this report is correct, we won't see that use expanded to the entire front panel until the 2015 iteration of the iPhone, at the earliest.
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source: MyDrivers (translated), PCPOP (translated) via GforGames