Apple Inc. (NASDAQ:AAPL) and GT Advanced Technologies Inc (NASDAQ:GTAT) may be in the early stages of a legal war, a report from CNBC reveals. This new spat also demonstrates how dangerous it could be for a relatively small company like GT Advanced Technologies to be a supplier of the monolithic iPhone maker.
Apple Inc. (NASDAQ:AAPL), according to Tom’s Guide Editor-In-Chief Mark Spoonauer, was supposed to make use of a sapphire display made by GT Advanced Technologies Inc (NASDAQ:GTAT). However, that plan did not push through, Spoonauer said based on his research.
According to Spoonauer, Apple Inc. (NASDAQ:AAPL) loaned GT Advanced Technologies Inc (NASDAQ:GTAT) $578 million to build the facility to make sapphire displays in Arizona people were lead to believe that the iPhone maker went with another supplier like Corning Incorporated (NYSE:GLW) when there was no sapphire screen for the iPhone 6 or 6 Plus.
“Behind the scenes, what I’m reading is that maybe GT Advanced didn’t reach some technical milestones that were required for Apple to pay the rest of its loan out in order for GT Advanced to finish the production,” he said, adding that it remains to be seen whether this is confirmed if confidentiality agreements do not include the protection of this information.
Spoonauer added that Apple Inc. (NASDAQ:AAPL) and GT Advanced Technologies Inc (NASDAQ:GTAT) may be headed in the direction of a legal skirmish. This would not be a big hit for the iPhone maker, the journalist said, but GT Advanced Technologies Inc may be another story. The smaller company has said that the terms of their agreement with the technology giant were “oppressive and burdensome,” Spoonauer said.
The editor-in-chief said that this shows how dangerous Apple can be as a partner as the company may change its mind about the companies it has agreements with. Smaller companies should be diverse in their dealings, he said, in order to avoid getting themselves in a situation similar to this one.
David E. Shaw’s D.E. Shaw & Co., L.P. reported owning about 11.89 million Apple Inc. (NASDAQ:AAPL) shares by the end of the first half of the year.
Meanwhile, Kerr Neilson’s Platinum Asset Management reported a stake was made up of about 2.53 million GT Advanced Technologies Inc (NASDAQ:GTAT) shares during the same period.
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