Apple and GT: Sapphire glass is cracked, but still not broken

Pricey watch glass could still make an iStuff appearance...


Apple's use of the legendary tough and durable sapphire glass in its equally legendary products hangs in the balance following the collapse of its main supplier.

GT Advanced Technologies filed for bankruptcy protection on Monday, causing its share price to crash and burn — falling by 93 per cent to a measly 80 cents.

Now rumours are emerging as to why GT may have taken this radical course of action when it had cash reserves of $85m.

According to sources cited by the Wall Street Journal, Apple withheld a $139m payment from GT. No one knows exactly why, although there are rumblings that it may be down to the quality of GT's sapphire output. If true, this may have played a huge part in its moves towards bankruptcy protection.

According to the pink 'un, Apple was said to have been planning to lob (in the form of a loan) GT a total of $578m to help it build a sapphire glass factory in Arizona. The last payment is likely to have been part of this total.

Thomas Gutierrez, CEO of the stricken firm, reportedly flogged off 700,000 shares since February, amounting to more than $10m.

He is also reported to have sold a load of shares the day before it emerged that Apple would not be using sapphire glass in either model of the iPhone 6. The company's filing with the SEC said that the share sales were part of a pre-arranged plan put into place in March this year.

Since the release of the iPhone 6, GT's stock has plunged from $17.38 to $14.94.

However, analysis firm KGI claimed that sapphire will still be seen in the Apple Watch, as the screen is small and could be produced by other manufacturers, and will also be used on the iPhone Touch ID sensor and camera, although probably not the screen.

KGI said Apple still has plans to use sapphire, and may yet call upon beleaguered GT to produce it.

So why not just switch to another manufacturer and be done with it? Well, according to the dons at KGI, no other sapphire glass blower makes the glass tough enough. In drop tests, GT always reigned supreme.

The relationship between Cupertino and its glassy chum looks rocky just now, but peace (prompted by business necessity) could break out at any time. ®

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