Thank you, Wikipedia.
In November 2013, GTAT technologies excitedly announced a contract with Apple to supply sapphire for screens and lenses. Rumors started to fly about the use of this pricey product for the full displays on the iPhone 6. When the new products were announced, it turns out that sapphire would be used primarily for lenses and for the face of the smaller Apple Watch. Yesterday, GTAT technologies filed for Chapter 11 bankruptcy.
How did this company go from the penthouse to the doghouse so quickly?
This article from Mac Observer gives some insight: Apple Sapphire Partner's Bankruptcy Shows It's Hard to Be an Apple Supplier - The Mac Observer
That's because Apple leverages it's massive cash hoard and huge orders to extract the very best terms that it can. Those terms often leave companies unpaid for many months, borrowing money to pay their corporate bills while they wait, and operating on razor thin margins the whole time. Apple also has incredibly exacting specifications that can leave companies on the hook for any problems.
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Now, imagine this scenario: GT produces a lot of sapphire material for Apple; its terms with Apple dictate that Apple doesn't pay until sometime after Apple accepts delivery; those terms also allow Apple to choose when it accepts delivery; Apple's plans—say, for the Apple Watch—change due to software or some reason unrelated to sapphire; those terms also specify that GT cannot sell the material to anyone else.
That's a recipe for bankruptcy if ever there was one, and it's not only in the realm of possibility, I believe it is in the realm of likelihood.
These are the risks that go along with supplying the most profitable company on the planet. The flip side is the potential for large profits and dealing with a company that itself is not likely to go under.
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