If there's no contract between Apple and LG, I don't know if they have much of a case here.
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LG Seeking Compensation From Apple Over Canceled MicroLED Apple Watch Project
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Yeah, The article also only says LG's equipment partners didn't have written agreement.
Handshake deals are not uncommon when companies have a long standing relationship. If you wait for legal to vet contracts and start work Apple could very well still be using CRTs in iMacs.
I once worked a contract where we were six or so months in before legal OK's the contract. My client said unless our legal put something in you just can't live with, please don't make any changes even if it is to correct a typo or add a comma. If you do, my legal will take another six months checking spelling in dictionaries or deciding if they want Oxford commas or not.
Sometimes some tech is not ready for prime time, yet.
Given the long standing relationships, as well as possible cultural norms, I'm guessing they resolve this amicably.
Probably they needed the business so much to risk it. Or they needed to be able to prove they could manufacture these displays meeting Apple standards, so they decided to equip themselves to do so.
Hopefully their efforts were not in vain and they could find another project for their investment.
With the primary manufacturer we work with at my job, we have written agreements on basically nothing. If we needed to have a signed contract in hand for everything our new products would never actually get made.
Ah... it's a PROFIT DEAL!
Yeah... I suppose Apple's 160,000+ well-compensated employees need to get paid, ditto with Apple's massive overhead costs.
Isn’t this just part of being a technology company? Apple also wastes tons of their own money and then cancels projects when they don’t turn out viable. Google famously does the same. I’m sure Samsung is no different. When you are advancing new technologies some ideas simply aren’t going to pan out.
It would be surprising to o specific work without a contract given the statute of frauds etc. Preparatory work etc wouldn’t be for the product. When all the facts are out, it should be interesting to see what was what.
If they had a the green light from Apple through email or anything written or even a phone call to start investing in the manufacturing process then it could be considered a verbal agreement, some verbal agreements are legally binding. All it takes is an offer made to Apple and Apple's acceptance.
Probably true but doesn't make LG sound great. LG actually wants to sell them panels. Apple only wants them around as a theoretical threat to other suppliers.
This is normal business practice, and yes, there are always contractual agreements for R&D. Apple hit the eject button and LG wants profitable compensation based on work completed. LG overstates their loss, Apple undervalues LG’s loss. They do the song and dance, come to an agreement and move on.
If LG couldn’t perform how do they have a case?
Price was too high and yields too low.
Ultimately the watch doesn’t need to be brighter nor do the colors need to be more accurate. “I’d buy that smartwatch if only the colorspace were reference spec” is a sentence nobody said ever.
Price was too high and yields too low.
Ultimately the watch doesn’t need to be brighter nor do the colors need to be more accurate. “I’d buy that smartwatch if only the colorspace were reference spec” is a sentence nobody said ever.
I am positive they had contracts in place. They’re just asking for AAPL to pay up. But BULLY TIM won’t because he thinks he’s equivalent to a dictator from Russia! Too much power for that human scum!
Apple has to play nice with their loyal suppliers. The next iPhone will also have the display and camera system from Samsung if rumors are right. Samsung is the one that keeps copying Apple with almost all Apple has to offer. Next iPhone will be half a Samsung phone with an Apple logo on the back. Not the latest and greatest camera system Samsung has to offer. Same for displays. Samsung will up the ante in their next top of the line phones. LG has a long history of delivering displays to Apple and is also a big competitor too Samsung. LG isn’t offering phones any more and hasn’t copied apples look and feel. Maybe Timmy can get some cheaper from Samsung now, but in the end Samsung will take a big bite out of Apple. Won’t be the first time Samsung did.
This is actually extremely common in tech industry. Nearly every large strategic project I've worked on in tech is done this way. There are many reason for why this is preferable:
1. The legal contractual negotiation and discovery can take a really long time. Often 1 year+. You don't want to hold off development work or progress for years while waiting for contract to sign.
2. There are necessary details for the contract that need to be discovered by both mix of legal research and engineering. Some contractual terms are unknown until engineering work has proceeded to a certain point. A bit of a chicken or the egg type problem. ex. How do you know whether your company can contractually agree to build X number of parts per year, until you know how many you can build per factory per year.
3. There needs to be engineering work to determine if the proposal is even viable. What's the point of a contract if it's not feasible to execute it. <--- This exact situation.
If I were to make an educated guess, Apple didn't give LG any hints in the months leading up to the cancellation. Typically when one partner want to abandon, it's obvious from the working communication months ahead of time. But in typical Apple secrecy, they likely didn't tell LG anything until they pulled the plug on the project.
We don't know. This is linking a Korean article which I'm assuming was translated to get the information. The other articles I found said that the compensation would be on increased price of panels for other products.
This is less of a legal fight than a "hey buddy, help me out here" conversation that is normal in business communication.
An informal contract (like agreements and assurances given informally) can still constitute a valid contract, hence why they would be suing.
It says they didn’t have formal contracts, which is not the same. You can have written agreements, say by what is being said in emails, without this having the form of a formal contract, but can still be legally binding.
There is no typical R&D involved in this case as such. They were trying to make production plan to make MicroLED displays by buying patent and equipment.
Besides, these penalty compensation if it goes at billions, may involve executive kick backs through various indirect means.
GT Advanced Sapphire crystal foundries were entered some agreement to get loans in several hundred millions as loan but eventually produced faulty crystals but ended up selling the equipment and get away. There pointers on some possible scam!
If LG is a listed company, it can't spend money in such huge amount without a valid contract. This is a financial risk they might have mentioned it in their disclosures. Typically it has been their dummy subsidiary ones which will take such risks.