LG Seeking Compensation From Apple Over Canceled MicroLED Apple Watch Project

[dampfnudel]

Jobs rolling over in his grave once again. Gone are the days of bold, industry-shaking moves.

It's all about tightening screws, squeezing pennies from suppliers and customers. Apple gave up writing their own AI and has now outsourced it to Open AI without a coherent strategy (unless you count memojis as a strategy for investing tens of billions of dollars). Apple is doing their best to stay average, having their ecosystem do all the heavy lifting. How long is that going to last?

Long enough to give Tim and his close in age cohorts time to retire into the sunset aboard their yachts. Lets hope the millennials or Gen Z who will be in the top positions at Apple years from now will be able to save Apple when it needs to be saved. Unfortunately this time there won’t be a second coming of Steve to save the day so some new blood will have to do it.

 

[PhoenixAnhart]

My guess is that no supplier/manufacturer will ever go into a verbal agreement with Apple in the future. But when plunking down that much capital, LG should have had something signed in advance.

Why are you assuming they don't?????

 

[dcjames]

Why would any company go and make enormous investments without some sort of contract in place?

There actually does not have to be formal written contracts in place for legal remedies to happen here. In legalspeak, so long as there is a provable "meeting of the minds" - meaning emails, texts, recordings of zoom meetings, contemporaneous meeting notes, etc., in which future work and expected compensation is discussed and agreed by both parties to being the path forward - then the injured party can be awarded some or all of the discussed compensation based on how far into the agreed upon work they had progressed, regardless of whether a formal contract was actually signed. Google "meeting of the minds" for more info.

 

[svish]

Good to know. Apple may compensate LG or form another deal with LG for future products.

 

[lilkwarrior]

Here we go with a bunch of "no contract: tough loss LG" in favor of Apple Inc. LG probably has 500 contracts with Apple for all kinds of other stuff. There was likely some perception of this moving forward driven by Apple and they were just taking care of a good customer by going a bit out on a limb on this one... with full expectation that that customer wouldn't leave them holding the bag.

Hopefully Apple does the right thing by one of their very important vendors in who knows how many ways. Else, vendor learns an expensive lesson here- makes sure other vendors knows that this client is capable of skipping out on an expensive bill- and then ALL of them demand formal agreements in writing forever after... somewhat complicating Apples execution and even more so many efforts towards secrecy.

"We" always take the Apple side in all things/matters/situations and there's always 2 sides to every story.

There’s at least three sides to every story: One side, the other, and the truth

 

[vantelimus]

The company now faces potential claims from its equipment partners, some of whom had also invested in the project without formal contracts in place.

There must be more to the story. If it is as simple as Apple cajoled LG into making investments with no guarantee of business, then it is hard to have sympathy for LG because 1) LG is a large sophisticated diversified company and should know better; and 2) they appear to have played their equipment partners the same way.

 

[jlc1978]

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.

There's more to it than that. Sure, Apple, like any company, likes competition between suppliers; but that includes more than price. I suspect Apple values the ability to produce quality displays at the defect free quantity they need, and pricing, while important, doesn't mean a rock bottom price. Engineering teams need to be integrated, as do others to meet Apple's goals.

Apple isn't Walmart where they say "We'll pay this much on these terms and you must lower the cost x% every yer. Take it or leave it."

There must be more to the story. If it is as simple as Apple cajoled LG into making investments with no guarantee of business, then it is hard to have sympathy for LG because 1) LG is a large sophisticated diversified company and should know better; and 2) they appear to have played their equipment partners the same way.

I agree. Some people seem to think this is some adversarial situation with lawyers on standby, when, IMHO, it's probably just a normal business negotiation over what is a reasonable outcome. Apple may very well want LG o continue development and paying them helps ensure that happens.

This could, as one scenario, be LG saying to Apple "yea, we can't hit the goal we set but if you want us to continue R&D we need to get some of our investment back or we'll have to just kill the project."

 

[CapitalIdea]

Let’s turn this into a scenario: I heard a friend of mine likes crab cakes. Since I wanted attention, I went to the grocery store to buy lump crab meat and the other ingredients to make them. I then invited them to come over for dinner, but it turns out they already have other plans. Should I try to sue them for the money I spent on those expensive ingredients? No. Should I even expect them to just give me money because of an inconvenience? No. Because that would be incredibly stupid, and isn’t their responsibility.

 

[therunningman]

Why are you assuming they don't?????

The article did specify that there were no signed contracts between LG and its suppliers. I assumed as much with Apple/LG since the article didn't specifically mention the existence of an Apple/LG contract.

 

[jlc1978]

Let’s turn this into a scenario: I heard a friend of mine likes crab cakes. Since I wanted attention, I went to the grocery store to buy lump crab meat and the other ingredients to make them. I then invited them to come over for dinner, but it turns out they already have other plans. Should I try to sue them for the money I spent on those expensive ingredients? No. Should I even expect them to just give me money because of an inconvenience? No. Because that would be incredibly stupid, and isn’t their responsibility.

More like your friend owns a restaurant you have supplied with various items over the years. Sometimes the friend may call and say “I need this in a hurry” and you deliver without a contract and he pays you. Then he goes to you and says, “I’m thinking of offering crab cakes, what can you do?” You say, ”let me setup a supply chain and see what it can do.”. He says, “Ok.” You do it, and it doesn’t work as needed. So you say, “Well I can kill the whole thing or keep working but if you want me to keep working I need some payment.” “If I kill it I’d appreciate some payments to helop reduc emy losses.”

It’s not about suing but working as two companies with an interest in an ongoing relationship.

 

[paulovsouza]

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.

You’re naming big companies that have a bottomless pit of money, who take advantage of small companies by stealing their ideas, or getting away with offering them terrible contracts because they’re too big to fail, or a lawsuit is a slap on the wrist. Which proves my point.

 

[vantelimus]

Everyone talking about LG’s negligence, but Apple being a big company I can see them forcing their hand, and Apple knowing they could back out at any time being a plus for them. LG probably relies on Apple, Samsung makes their own display, there’s no competition.

Apple isn’t known as the kind of company that acts like Walmart, which literally would threaten producers in the US to move their operations to China or lose business.

Apple does, though, have significant leverage because it accounts for 25% of LGs revenue. With that kind of clout, Apple doesn’t have to force anything. They ask and LG is probably quick to find ways to say yes. There’s more to this story that we aren’t hearing.