GT Advanced and Apple have reached a deal that will see the two companies dissolving their partnership, according to documents submitted to the court earlier today, reports The Wall Street Journal. According to GT Advanced attorney Luc Despins, the agreement between the two companies marks an „amicable parting of the ways.“
Under the terms of the deal, GT Advanced will sell off more than 2,000 sapphire furnaces, with some of the proceeds going to Apple as repayment for the $440 million loan the company gave GT to purchase the sapphire equipment.
Mr. Despins said the proposed settlement allows GT Advanced to try to sell the furnaces at the Mesa, Ariz. sapphire-manufacturing facility, and give the money to Apple, which financed the equipment. GT Advanced would surrender its claims against Apple, under the deal, and agree not to disparage the technology giant, Mr. Despins said.
There was some speculation that GT Advanced was aiming to force Apple into taking over the sapphire operation, but it appears that Apple is not interested as both parties seem to want out of the deal. With GT planning to sell off all of the furnaces, it is unclear whether Apple will be able to source enough sapphire from other suppliers in order to incorporate sapphire into the iPhone display in the future.
Apple and GT Advanced have also agreed to file a revised explanation for the company’s bankruptcy filing, which will be provided to the court at a November 25 hearing, but the original court papers remain sealed. If approved, the settlement between GT Advanced and Apple will see original court papers stricken from the court record, keeping the details of what went wrong between the two companies quiet.
Rumors have suggested that the deal between GT Advanced and Apple began falling apart early on, with GT Advanced missing technical milestones as early as February. A failure to produce high-quality sapphire led Apple to withhold a final $139 million loan payment, which may have been the reason behind GT Advanced’s Chapter 11 bankruptcy protection filing in early October.
GT Advanced will begin winding down operations at its sapphire plant in the near future, eliminating the jobs of more than 727 employees in the coming weeks. GT Advanced plans to prepare existing sapphire boules for sale, clean and sell furnaces, and then close the plant for good by December 31.
Earlier this week at its media event, Apple announced that it would be partnering with rock group U2 to offer its new „Songs of Innocence“ album to 500 million iTunes customers for free. However, the deal upset some users who did not want the album added to their accounts or automatically downloaded in some instances. Now, Re/code reports that the album has been downloaded over 2 million times by users just three days after being made available.
The move was part of an estimated $100 million deal between U2, Apple, and Universal Music Group, as reported by Billboard Magazine this morning. U2 manager Guy Oseary said in an interview with the magazine that the deal between the band and Apple was a „long-term relationship“ while shooting down criticism that the deal was disruptive to the of rest music industry.
The deal has also been very beneficial for U2’s back-catalog on iTunes, as 17 of their prior albums are currently on the iTunes Top 100. U2’s „Songs of Innocence“ will be available to download for iTunes customers until the middle of October.