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Apple/GT contract included $50M penalty for leaking Apple products
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MacNN Staff
Join Date: Jul 2012
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Filings in GT Advanced's ongoing bankruptcy proceedings reveal that the sapphire supplier's contract with Apple included a $50 million penalty for leaking any of the latter's product information, according to the Financial Times. As it prepares for a Wednesday court hearing, GT is asking for more details of the Apple contract to be revealed, which it claims are important to creditors and shareholders. It adds that "Apple has treated the confidentiality agreement itself as 'confidential.'"
The Times hints that other Apple suppliers may have similar penalties in their contracts, but if so the details are unknown. While leaks are relatively commonplace, Apple still depends heavily on an element of surprise to maximize its marketing. Keeping product features under guard garners the company more media attention for its announcements, including mainstream press coverage.
GT's bankruptcy has been linked to Apple withholding a final $139 million payment. The Wall Street Journal suggests, in turn, that this is because GT was unable to deliver enough sapphire to use in iPhone 6 displays. The company is facing a class action lawsuit from shareholders, who argue that it "misrepresented and/or concealed" its financial situation and ability to meet Apple demands.
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Last edited by NewsPoster; Oct 14, 2014 at 04:02 AM.
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Senior User
Join Date: Jan 2008
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Seems like the one thing I've not heard from GT is why it signed a contract with Apple but then didn't deliver on that contract...it would seem THAT'S what is relative to this case.
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Grizzled Veteran
Join Date: May 1999
Location: Pasadena, CA USA
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Nice deflection. Why shouldn't Apple protect it's secrets? This company is a loser. Too bad Apple those to deal with them in the first place.
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Forum Regular
Join Date: Apr 2010
Location: Prescott, AZ
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GT didn't ever pay this 'fine' right? It's interesting only from a this is how Apple does biz perspective. I doubt any company has paid this in spite of all the leaks.
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Grizzled Veteran
Join Date: Jun 2008
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Why would GT pay the fine for leaking information when they didn't leak information? If they did leak information, what was that information?
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Junior Member
Join Date: Dec 2005
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The relevant point of bringing up the penalty in the bankruptcy proceedings is that just about anything the company might say in its own defense might violate the clause if the proceedings weren't sealed.
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Junior Member
Join Date: Dec 2005
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While "the Wall Street Journal 'suggests' that this is because GT was unable to deliver enough sapphire to use in iPhone 6 displays", Apple has never announced that the iPhone 6 was ever supposed to use sapphire for the screen -- that has only been media conjecture. Given publicly available information, it's just as plausible for the iWatch to have slipped from fall to spring causing the demand for GT's sapphire not to materialize before they ran out of cash. Revealing something like that would certainly be "problematic" relative to the confidentiality clause.
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Junior Member
Join Date: Apr 2000
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If, indeed, leaking the confidentiality agreement and its terms demonstrates an "oppressive" and "burdensome" agreement; then the only thing it would prove is the lack of due diligence or level or desperation on the part of GT Advanced's leadership. This whole thing smells a bit like an orchestrated series of events designed to both catch Apple off guard in terms of being prepared to launch the Apple Watch and to cast them in an unfavorable light. Something is definitely off, one way or another. Whether the information becomes public or not shouldn't really matter to anyone, as the only individuals who really need to know are those judging the merits (or lack thereof) under the law.
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Forum Regular
Join Date: Jul 2006
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Considering that GT's CEO knew that the iPhone 6 wasn't using sapphire displays, why did he tell shareholders on August 26th how great his company was doing financially, and paint a rosy picture of the company's future?
And oh-by-the-way, he sold millions of dollars of stock during the last year, including shortly before the bankruptcy announcement. I think he planned all along to make the deal with Apple, drive up the stock price, then sell his shares and bail out.
I wonder when he knew he couldn't produce the quality of sapphire Apple contracted for.
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