Samsung Reportedly Hits Apple with 20% Price Increase for iOS Device Chips

[MacRumors]

MarketWatch reports on an article from Korean newspaper Chosun Ilbo claiming that Samsung has hit Apple with a 20% price increase on the A-series chips used to power Apple's iOS devices.

"Samsung Electronics recently asked Apple for a significant price raise in (the mobile processor known as) application processor," the person was quoted as saying in the report. "Apple first disapproved it, but finding no replacement supplier, it accepted the (increase.)"

The two firms have started to reflect the new supply price recently, the report added, citing the same person.

While Apple's latest A6 and A6X chips are custom designs from the company's in-house chip team, Samsung continues to serve as the foundry for manufacturing the chips used throughout Apple's iOS device lineup.

A bill of materials estimate for the iPhone 5 pegged the cost of the A6 chip at approximately $17.50, meaning that a 20% increase in price would translate to roughly $3.50 in increased costs per unit for Apple.

Apple has been reported several times in recent years to be attempting to move chip production to TSMC, but so far the company has been unwilling or unable to make the switch. TSMC's upcoming 20-nanometer process targeted for mass production in late 2013 could, however, serve as a catalyst for a move.

Article Link: Samsung Reportedly Hits Apple with 20% Price Increase for iOS Device Chips

[HishamAkhtar]

Hey Tim, how's Apple's thermonuclear war going?

[Sky Blue]

got to get that $1 Billion back some how!

[Nathan20]

Making up for the court case loss.

[wordoflife]

At some point Apple will just find a new supplier and it'll hurt Samsung more in the end.

Good job.

[Aluminum213]

Originally Posted by Sky Blue

got to get that $1 Billion back some how!

this, Samsung just got back its billion dollar loss

[The Phazer]

Originally Posted by wordoflife

At some point Apple will just find a new supplier and it'll hurt Samsung more in the end.

Good job.

Apple patently already have.

So given that Samsung may as well milk them for every penny in the meantime.

[MasterHowl]

These big companies are so petty.

I wish they'd focus more on innovation and bringing out cool new tech rather than trying to screw each other over...

[MrT8064]

Slightest hint that Apple will switch to another supplier, Samsung put's price up as Apple are totally dependant at the moment. Clever, I guess.

[Aluminum213]

Originally Posted by wordoflife

At some point Apple will just find a new supplier and it'll hurt Samsung more in the end.

Good job.

if there was one Apple would have done so a loooooong time ago and if Apple could in the near future Samsung wouldn't have done this

[the8thark]

This makes Apple more likely to hasten their move away from Samsung. if this rumour is true. And Apple away from Samaung = $0 for Samaung as they won't be buying parts from Samsung anymore.

Lesson Samsung needs to learn.
"Don't bite the hand that feeds you cause one day the hand will stop feeding you if you keep biting it".

[paulbennett95]

I can't wait to see what happens to Samsung after apple stops using them for components. A lot less money for Samsung to "innovate" with, hah.

[dethmaShine]

1. Seems fairly legal.
2. Fair as this is the first time they have increased the costs in the last 5 years according to my information.
3. 20% is steep in any conceivable manner.
4. This is probably true as they would want those billion dollars back (which they haven't paid yet).
5. Will reach to further negotiations in my opinion. 1/5th is high but I assume 1/7ths or 1/8ths will be appreciated.

[Sora]

The customer won't notice this increase.
Pricing structure is already engrained into Apple's customer base.

[JaySoul]

Samsung and Apple should buy a kitten together.

[urkel]

Once again, Apples selfish and petty wars with former partners results in hurting their own customers.

[charlesdayton]

This is a bad move for Samsung.

Apple is reducing their dependence on Samsung and buying from other suppliers. Plus Apple is one of Samsung's largest client.

[Ries]

Originally Posted by the8thark

This makes Apple more likely to hasten their move away from Samsung. if this rumour is true. And Apple away from Samaung = $0 for Samaung as they won't be buying parts from Samsung anymore.

Lesson Samsung needs to learn.
"Don't bite the hand that feeds you cause one day the hand will stop feeding you if you keep biting it".

What makes you think, that the others can do it cheaper?

[macchiato2009]

Samsung has decided to squeeze the apple to get as much as juice as possible until it gets dumped

[Hellhammer]

Originally Posted by the8thark

Lesson Samsung needs to learn.
"Don't bite the hand that feeds you cause one day the hand will stop feeding you if you keep biting it".

That's the lesson Apple needs to learn. Samsung produces everything from LCDs to NAND and SoCs which makes them independent, whereas Apple doesn't own a single factory. Without Samsung, Apple couldn't make a single iPhone or iPad but Samsung would do just fine without Apple, so who is feeding who?

[Muscle Master]

I love it...

[urkel]

Something that a lot of people are missing is that Google, Samsung and Apple don't "need" each other. But without partnerships then Apple is creating a worse product and that means its the consumers that will suffer the most.

[shanson27]

it's time to leave the store, Apple !

[Northgrove]

Originally Posted by the8thark

This makes Apple more likely to hasten their move away from Samsung. if this rumour is true. And Apple away from Samaung = $0 for Samaung as they won't be buying parts from Samsung anymore.

Lesson Samsung needs to learn.
"Don't bite the hand that feeds you cause one day the hand will stop feeding you if you keep biting it".

Hasten their move? Isn't it more about others not being ready for Apple, than Apple not being ready for them? It takes quite some resources to take on Apple.

[Krazy Bill]

Tim Cook - Note to self: Don't bite the hand that feeds you.