There’s been a ton of crazy news coming out this week in regards to Apple’s sapphire partner GT Advanced Technologies. It’s making me wonder if the Apple Watch is doomed. Here’s what’s going down: earlier this week GT Advanced Technologies announced it was filing for Chapter 11 bankruptcy. I don’t think anyone saw that coming, not with a company like Apple as a partner. Apple typically plays a big role in the success of its companies: Foxconn, for example, relies on Cupertino so much that it often tries to find other business segments to offset that dependence.
On Friday, GT Advanced Technologies revealed that it wants to wind down sapphire production. Then a court document from the company surfaced that suggests its partnership with Apple may be to blame for its failed business. It called its agreement with Apple’s both burdensome and oppressive and said that, while GT Advanced Technologies used to work as a supplier of parts it’s now also working as a major manufacturer of sapphire. Somewhere along the line, it seems, the company lost focus. As a result, it now says it may need to close two factories, including the famous one that Apple uses in Arizona and another in Connecticut. The closures may lead to 890 layoffs of GT Advanced Technologies employees.
What’s this mean for the Apple Watch? I don’t know yet, but it seems pretty gloomy. We don’t know how much sapphire GT Advanced Technologies has already produced, so it’s unclear how many Apple Watch units have been manufactured. Is there enough sapphire for Apple to release the watch on time and to continue selling it? What does this mean for the price of the watch, too, if there’s not enough sapphire to go around? There are plenty of questions that remain unanswered, and Apple so far hasn’t commented on the situation at all.
It seems unlikely to me that Apple is going to be able to move ahead as if nothing has happened, at least if it’s getting all of its sapphire from a company that’s planning to wind down development and close two factories. Can Apple tap another supplier? It may have to. Can Apple buy GT Advanced Technologies and pick up where the company left off? This is going to be a really compelling story to follow, and we’ll be sure to keep you in the loop as it unfolds.