When Apple and GT Technologies first struck a deal for GT to produce sapphire for Apple’s products, GT announced the deal with excitement. Now that GT has filed for bankruptcy, the company is painting the deal in very a different light. GT COO David Squiller condemned Apple for pulling a “bait and switch” resulting in “an onerous and massively one-sided deal.”
That statement is a big departure from what GT’s president Tom Gutierrez said in a 2013 statement. “We are very excited about this agreement with Apple,” Gutierrez wrote in headier days.
Squiller explained why GT blames Apple for its current financial woes, stating that GT couldn’t produce the agreed-upon amount of sapphire in time because the fabrication equipment that Apple had picked out couldn’t do the job fast enough. GT did produce some sapphire, of course, but it wasn’t enough to satisfy Apple’s demands. And since GT and Apple had an exclusivity agreement, GT couldn’t sell the sapphire Apple no longer wanted to any other company.
This situation obvious sucks hard for GT, but the problem with blaming Apple is actually pretty clearly laid out in Squiller’s statement:
GTAT committed to supply millions of units of sapphire material. Apple, however, has no obligation to buy any of that sapphire material.
Yeah, thats a shitty deal, but it’s a deal the company agreed to. Just because the worst-case scenario that could happen within the confines of the deal came to pass doesn’t mean Apple hoodwinked GT into signing a deal against its will. Apple didn’t write the crappy terms in invisible ink.
GT took a major gamble and it didn’t pay off. Apple carried out the terms of the agreement brutally and without compassion, probably because Apple is a profit-driven multinational corporation and not a kind nun.
I’ve reached out for comment to Apple and GT and will update if they respond, but however this mess turns out, it’s a warning to Apple suppliers that just because the iPhone maker pumps into your operation doesn’t mean that you’re invulnerable.