Apple and its former sapphire supplier GT Advanced have reached an agreement that will allow GT Advanced to absolve itself of the remaining $439 million that it owes Apple, reports The Wall Street Journal.
Under the settlement, GT Advanced will host an auction on November 23 to get rid of the equipment that it contributed to the sapphire making process, with the proceeds being split between the two companies. Equipment that does not sell during the auction will be given to Apple.
/article-new/2014/03/gt_advanced_logo.jpg?lossy){kind=logo}
While GT intends to hang on to some of the equipment--as many as 600 sapphire-making furnaces--it is prepared to auction what it can and abandon what it can't cart off, court papers say.
Anything not sold will be handed over to Apple, which has agreed to scrap the equipment and extinguish the loan it made to transform GT from an equipment manufacturer into a supplier of smartphone-screen material.
Following the dissolution of the relationship between GT Advanced and Apple, GT Advanced agreed to sell off its sapphire furnaces to repay the loan Apple had provided to buy the equipment in the first place. Over the course of the past year, GT Advanced has been unable to find a buyer for the sapphire furnaces.
GT Advanced and Apple originally partnered up to produce sapphire displays for the iPhone 6 and the iPhone 6s Plus, but the deal soured when GT Advanced was unable to meet deadlines and produce sapphire that met Apple's standards. GT Advanced filed for bankruptcy in October of 2014, laying off more than 700 employees and shuttering the Mesa, Arizona factory, which Apple is repurposing as a data center.
Apple and GT Advanced's new agreement is set to be finalized following the approval of a bankruptcy judge.
Top Rated Comments
All gone to dust. I guess it's all aluminium for the foreseeable future. I wonder if we might see a return to a glass back like the iPhone 4? It was such a fine design.
Well. How wrong I was. :oops:
I always thought GT's bankruptcy was a bit of a charade, so that Apple could eventually buy their company on the cheap and control their own sapphire plant/margins in the long term.
If I understand you correctly, that would be unethical. And if so, it would make other smaller companies wary of partnering with Apple in the future. Not worth it for Apple at all.Well. How wrong I was. :oops:
Remember when we were all hoping for sapphire iPhone screens and liquid metal frames?
It was at that. I owned the 4 and the 4S, and I thought it was a beautiful design. Still do. If they offered it with today's technology I would still have one.All gone to dust. I guess it's all aluminium for the foreseeable future. I wonder if we might see a return to a glass back like the iPhone 4? It was such a fine design.
Still seems like a shame to me! All those months of rumors and then, nothing. Maybe there's still part of this story that we aren't seeing. Isn't it possible apple is not the bad guy here? If I were GT and had a good thing going that apple wanted, I'd probably get into a contract with them too, regardless of whether I really knew if I could deliver. My speculation is that they got excited, hoped they could "pull it off" and they couldn't. This is capitalism. This is one of the tragic realities in free market. We're free to make money and free to lose it.
I'm not sure why you would imply that Apple was "the bad guy." They entered into a business agreement with a company to deliver a product. They even underwrote their expansion. The company never delivered the agreed product, so they terminated the deal. Pretty clear cut and reasonable approach to the situation.The only tragedy here is the apparent issue with the GT board members getting rich while their company dissolved and 700 employees ended up unemployed.