Is Apple planning to make its own Sapphire? What would Jobs do?

Following news of GT Advanced Technologies stock value falling nearly 90%, in the wake of Apple’s decision not to use Sapphire in the final inception of the iPhone 6 and 6 Plus touchscreens, the hyped-up Arizona Sapphire Crystal manufacturer is now breaking under its own weight, forced to file bankruptcy protection from creditors and investors.

It’s unclear whether this situation was brought on by a false sense of security, or by wishful thinking of a company that might have bit more than it could chew. What is clear, however, is that GTAT’s innovative manufacturing process of the one material able to compete with Corning’s Gorilla Glass, might very well be up for grabs, and Apple is now in the unique position where it might be able to afford to buy and operate its own Sapphire screen manufacturing plant, and supply the material to Apple devices at a considerably lower cost.

The question is: will this scenario ever happen?

First of all, GTAT signed a multiyear agreement with Apple, to supply the company with sapphire material in November, which required a $578 million prepayment. As of now, GT Advanced is in a tremendous debt with Apple, set to be re-payed over the next five-years, starting in 2015.

If that wasn’t bad enough, GTAT’s total cash value, as stated in its Chapter 11 document, filed October 6th 2014, is in the amount of $85 million, which means, whoever buys the company, will have to buy its debt to Apple as well. Simple economics, really.

The reason why such scenario won’t surprise us is simple: this is exactly the kind of opportunity Steve Jobs would have jumped into with both feet.

One of Steve Jobs’ pet peeves was to be in control of every aspect of his products. The ability to manufacture one of the most important components in Apple devices, namely the touchscreens, would be short of a dream came true, for Jobs legacy.

Thanks to GTAT’s particle accelerator, manufacturing Sapphire material is much less complex than internal hardware and chips, an outsourced endeavor the company still relies on, for its A-series chip, camera and other internal components.

Of course, with GTAT’s financial standing, Apple would have some tough choices to make, as it would still be out of several hundred million dollars, even after taking over all of the company’s assets. It’s very doubtful that Apple is the kind of company that just “forgets” a half a billion dollar “IOU”, which comes down to what Apple might do with GTAT’s assets to recover its investment, should the company default.