Both Apple and GT Advanced Technologies have largely remained silent over their falling out, but new unsealed court documents reveal that the companies never would have worked together well.
The bankruptcy filing by GT Advanced shocked investors because it came after the company announced a massive deal to supply Apple with sapphire glass for its devices. GT Advanced now says that Apple pulled a bait-and-switch. However, documents suggest that GT Advanced should have been more careful.
"GTAT committed to supply millions of units of sapphire material. Apple, however, has no obligation to buy any of that sapphire material," said David Squiller, GT Advanced chief operating officer, in a statement.
Clearly that's not a very good deal for GTAT, but it's still the deal that it accepted. Many suggest that GTAT is to blame for its own downfall by taking a gamble that did not pay off. Apple, however, dealt with the situation the way any profit-driven corporation would. Despite this, Apple did reportedly put some pressure on GT Advanced to sign the deal.
"When GTAT's management expressed obvious concerns to Apple regarding the deal terms during contract negotiations, Apple responded that similar terms are required for other Apple suppliers and GTAT should: 'Put on your big boy pants and accept the agreement,' " said GT Advanced during the bankruptcy filings.
Squiller went on to say that once the sapphire manufacturing plant was open in December 2013, Apple employees assumed a level of authority that was disruptive to the production of sapphire at the plant. Apple also dictated what tools GTAT could use at the factory and did not allow GTAT to speak to suppliers involved with the sapphire-making process. Because of these factors it cost GTAT 30 percent more to make the sapphire and Apple did not take any responsibility for this increase.
Apple, however, had a different story, which it told in separate court filings.
"The [Squiller declaration] contained numerous statements about Apple that Apple believes to be untrue, irrelevant, and inflammatory," said the company. "Much of the Supplemental Squiller Declaration goes far beyond what was reasonably necessary to describe the Debtors' current financial situation and instead includes gratuitous characterizations of Apple's motives, negotiating tactics, and business practices."
Apple continued on to note that the failed deal did not work out too well for Apple, either, due to the fact that the company loaned GT Advanced Technologies $439 million but did not get the sapphire material that it wanted from the payment. In its statement, Apple went on to say that it "bent over backwards" to work with GTAT, which included making payments to the company after it failed to meet performance requirements.
