Behind Apple's Sapphire Screen Debacle

Frankie70 (803801) writes Apple invested more than $1 billion in an effort to make sapphire one of iPhone 6's selling point. But the iPhone 6 was released without the sapphire screen. GT Advanced Technologies, the small company chosen to supply Apple with enormous quantities of cheap sapphire, declared bankruptcy a month later. Recent documents from GT's bankruptcy proceedings, and conversations with people familiar with operations at Apple and GT, provide several clues as to what went wrong. GT said that to save costs, Apple decided not to install backup power supplies, and multiple outages ruined whole batches of sapphire. The terms Apple negotiated committed GT to supplying a huge amount of sapphire, but put Apple under no obligation to buy it. In its bankruptcy documents, GT would later accuse Apple of using "bait-and-switch" tactics, and said the terms of the deal were "onerous and massively one-sided."

Comments

Re:LMAO

[tlhIngan]

Not quite, It is more Apple ruined them by promising to buy their product and then not following through after they had already heavily invested in meeting the supply for that promise. regardless they need to accept responsibility for entering into such a lopsided agreement. You make stupid decisions and stupid things happen. Why would you trust any company in this way, especially apple.

Well, the other problem was the sapphire wasn't of sufficient quality. Apple's contract said they'd buy it if it was of a certain quality and it failed to meet the bar.

And while lopsided, Apple did lend over $1B as part of the contract to build the factory and merely demanded repayment on a schedule.

Now, Apple is claiming innocence to the fact that they didn't know of the troubles - saying if they knew they would've worked with GTAT to fix issues. Whether it's true or not, we don't know.

Apple bears part of the blame for coming up with the lopsided agreement in the first place. That's not to detract from the blame GT deserves for signing.

Well, Apple has lawyers draw up the contract. GTAT has lawyers to review the contract. It's not Apple presenting a contract to a 1-man shop - it's an organization that's been around and has the resources to scrutinize and negotiate. If GTAT only saw dollar signs when they were handed the contract and didn't review it closely, that's their fault. This isn't a big supplier going after a lone inventor (who may be given leeway for not completely understanding the deal).

Interestingly, Apple is keeping the plant and planning on re-hiring laid off workers. GTAT will be selling off the furnaces but Apple paid ofr the factory and is keeping it to manufacture... something.