Foxconn Looking to Build $5.7 Billion iPhone Display Factory to Win Apple Orders [iOS Blog]

Apple’s main assembly partner for iOS devices, Foxconn, is looking to increase its presence in Apple’s supply chain as it considers constructing a new plant to provide display’s for the popular devices, according to The Wall Street Journal. Total investment in the project could reach $5.7 billion.

Foxconn, formally known as Hon Hai Precision Industry Co. , is discussing a possible investment with the government of Zhengzhou, about 750 kilometers south of Beijing, according to people familiar with the talks. The two sides are discussing terms such as how to divide the investment, which could reach as much as 35 billion yuan ($5.7 billion), the people said.

The display is typically the most expensive single component in Apple’s iOS devices, and the company has long sourced the parts from a variety of vendors including Samsung, LG Display, Sharp, and Japan Display. Foxconn has been seeking to improve its display expertise in recent years, pursuing a troubled partnership with Sharp as it has tried to position itself to win orders for iPhone and iPad displays.

GT Advanced Technologies Officially Announces Sapphire Settlement With Apple

Earlier this week, it was revealed that Apple and its sapphire supplier GT Advanced Technologies had reached an agreement to effectively dissolve their partnership and allow GT to shut down operations at the Apple-owned sapphire production plant in Mesa, Arizona. Under the deal, GT will seek to sell off the over 2,000 sapphire furnaces currently installed at the facility, with the majority of the proceeds from those sales going to Apple to help repay $439 million in loans Apple made to help the operation get underway.

GT has now officially announced the deal and published the full agreement, redacting only the amounts Apple will be paid per furnace sold.

Under the terms of the settlement agreement, which is subject to approval by the Bankruptcy Court, GT will be released from all exclusivity obligations under its various agreements with Apple. GT will retain ownership of all production, ancillary and inventory assets located in Mesa and Apple is provided with a mechanism for recovering its $439 million pre-payment made to GT over a period of up to four years without interest, solely from a portion of the proceeds from ASF® [Advanced Sapphire Furnace] sales. The agreement provides for a mutual release of any and all claims by both parties. As a result of the agreed upon terms, GT retains control of its intellectual property and will be able to sell its sapphire growth and fabrication technology, including ASF and Hyperion™, without restrictions.

While the two companies are severing their production agreement, they will remain in contact as GT continues its research work focused on producing larger sapphire boules of over 165 kilograms. The two companies will meet at least quarterly to discuss GT’s progress on that front, with potential collaboration still possible if both sides agree to move forward.

GT filed for bankruptcy earlier this month as it became clear the company was spending over a million dollars per day to run the operation even as it was apparently unable to produce sapphire of the quality required by Apple. GT’s troubles began as early as February as it was late in meeting milestones to qualify for Apple loan payments. Apple’s continued withholding of the final $139 million payment may ultimately have resulted in GT deciding to pull the plug on the operation, even as Apple reportedly continued to try to help overcome GT’s technical problems.

GT is looking to wind down its sapphire production operation by the end of the year, wrapping up sapphire boule production currently underway and decommissioning the furnaces to prepare them for storage and resale. Roughly 650 employees at the Arizona plant have already been laid off, and the company will continue to lay off additional employees across its locations as it brings the production partnership with Apple to an end.

(Image: GT’s Advanced Sapphire Furnace)

Nike CEO Hints at Continued Partnership With Apple to Develop Stylish Fitness Wearables

Nike CEO Mark Parker sat down with Bloomberg’s Stephanie Ruhle to discuss the company’s brand and product strategy (via The Guardian). During the 13-minute-long “Market Makers” segment, Parker confirmed that he is bullish on Apple and the wearables market, hinting at a continued partnership between the two companies at the 9:45 mark.

Though Nike recently discontinued further development on its FuelBand fitness wearables, the sports and fitness company is not ready to abandon the wearables market, instead waiting for the market to mature beyond it current geeky status.

“I think it’s going to be a big part of the future, absolutely,” said Parker. “I think the form it takes is critical. You can go from the very geeky kind of wearables today – we’ve all seen some of those – to what I think you’ll see in the future, things that are more stealth, more integrated, more stylish and more functional, yes.”

Echoing his earlier comments, Parker suggested Apple may be part of Nike’s wearables strategy with the Nike CEO noting that the two companies that have a long history of working together can do things together they couldn’t do alone.

“Technologically we can do things together that we couldn’t do independently,” Parker said. “So yeah, that’s part of our plan, to expand the whole digital frontier in terms of wearables, and go from what we say is tens of millions of users – right now there’s 25 million Nike+ users – to hundreds of millions.”

Parker wouldn’t divulge details on any upcoming Apple-Nike collaborations, but the companies traditionally have worked together to promote each other’s health and fitness technologies. Apple has sold the FuelBand fitness bracelet in its retail stores, while the Nike+ Move app was among the first to support the M7 motion co-processor in the iPhone 5s.

The fitness partnership between Apple and Nike actually extends back to 2006 with the launch of Nike+iPod products such as the “Sport Kit” that allowed users to embed sensors in Nike shoes to wirelessly communicate exercise information to the iPod nano. Parker also has a long-term relationship with the Apple’s leadership, having worked closely with both Steve Jobs and Tim Cook, with Cook having served on Nike’s Board of Directors since 2005.