The supplier of crystal sapphire believed to be used in the forthcoming Apple Watch screens has filed for bankruptcy protection, raising questions over how Apple can get its smartwatch ready for a 2015 release.
GT Advanced Technologies and its subsidiaries (collectively GT) revealed in a statement that it would be applying for bankruptcy under Chapter 11 of the Bankruptcy Code in the US. This means it will continue to work under normal conditions until it can resolve issues with its creditors.
Apple also makes use of GT's sapphire for the camera and Touch ID sensor on the iPhone range. Apple also provided a loan of $578m to GT Advanced Technologies last year.
When it revealed the Apple Watch, the company declared that the face of the smartwatch would be constructed from sapphire glass in order to make it as scratch-resistant as possible.
However, with GT in financial trouble, questions were raised by Apple enthusiast website 9to5Mac on how Apple can source the sapphire needed to manufacture the much anticipated device.
Apple Watch is set to be released in early 2015 giving the company a tight deadline to source a new supplier that can be fitted into its manufacturing chain.
Tom Gutierrez, president and chief executive of GT, was adamant that filing for bankruptcy under Chapter 11 would not leave its clients in the lurch.
"Today's filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet," he said.
Gutierrez added that the company plans to continue to operate across its core businesses.
Despite moving towards bankruptcy, GT revealed that it has $85m in cash reserves and boasted second-quarter revenue growth and a solid balance sheet in its August 2014 corporate overview.
V3 contacted both companies for more information on the possible impact of the bankruptcy, but so far neither has responded.
The sapphire screen is a core feature, but the Apple Watch has many other attributes that have garnered the attention of smartwatch fans.
Comcast's £29.7bn winning bid more than twice the £13.7bn Rupert Murdoch valued Sky at just eight years ago
A nuclear strike has been considered, but Bruce Willis is nowhere in sight
Spray-on antenna could enable seamless integration of antennas with everyday objects
Parker Solar Probe, TESS and GOLD missions will deliver exciting data, claims NASA