Over the last year, the relationship between tech behemoths Apple and Samsung, has certainly seen significant strain. For years the two companies benefitted from mutual profit gains - mostly due to Apple’s wildly successful iPhone. Despite being fierce competitors in the smartphone/tablet market, Samsung shared an interest in Apple’s success as they provided critical components to the Cupertino-based company’s iPhone and iPad. These components ranged from application processors, displays, and memory modules. This certainly meant that both companies made billions of dollars off of these devices.
Well it appears the recent rift between the two has certainly widened in part to the fierce legal battles. According to a report earlier today from the Korea Times, an anonymous executive stated, Samsung Display will no longer make display panels for Apple, starting next year. The Koreans have already reduced the deliveries of displays to Apple, from 15 million LCDs in the first half of 2012, to 3 million in the third quarter, with an estimated 1.8 million units to be shipped by the end of the year. Samsung’s reasoning behind the move: they simply cannot afford to continue doing business with Apple due to the huge price discounts being demanded by the U.S. company. According to the report, the price per pixel has been more than halved from the iPad 2 to the iPad 3, and Samsung is not happy about it
The official informed the Korea Times that:
“We are unable to supply our flat-screens to Apple with huge price discounts. Samsung has already cut our portion of shipments to Apple and next year we will stop shipping displays.”
It was just revealed last week that Samsung had only been providing chip foundry services for the A6 chip found in the iPhone 5, after designing it for several years. To only add more controversy to the issue, Apple has been rumored as approaching both TSMC and Intel for foundry services, thus replacing Samsung altogether.
The report indicates that Samsung is looking to Amazon to fill the gap, and that Amazon has increased orders for displays. In addition, Samsung and Google are rumored to be collaborating on a new high-end tablet to take on Apple’s iPad. Whether or not these events are linked in some way to Samsung feeling comfortable in leaving Apple altogether is unknown however. It’s difficult to say as well if these actions by both companies are a direct result of animosity due to the recent legal battles. It surely does appear that these legal suits have had some impact. Nevertheless, the two companies seem to be creating mutual distance to protect their bottom lines and ultimately their futures.