Samsung Denies Claims of Price Hikes for iOS Device Chip Production

[Peppa]

Well, that just means prices will probably go up at the beginning of the year.

[Patriot24]

Originally Posted by Peppa

Well, that just means prices will probably go up at the beginning of the year.

I'm not so sure. If Samsung does decide to gouge Apple, it will be a short-term play that will only last as long as it takes Apple to move to TSMC or other supplier.

What is Samsung going to do when their #1 customer walks out the door for good? It is a delicate dance.

[JAT]

Originally Posted by gnasher729

Anywhere in the world, you can make a statement, and people can decide whether to believe it or not. If you talk to a magazine, they can decide whether to believe you or not. If they believe you and it is interesting, they'll print it. If they don't believe you, they won't print it.

In Germany, you can make any statement and make a declaration under oath that it is true. It is a crime to do that if the statement is actually false. So if you talk to a magazine, and they don't want to print it because they don't believe it, you call a lawyer as a witness, and declare under oath that you are saying the truth. They will now believe you. If it turns out that you lied, you are in trouble.

Why on earth would people go to all that trouble? Sounds suspiciously close to "Einstein's" definition of insanity.

[gnasher729]

Originally Posted by charlituna

I suspect it is more of that ilk. Apple is cutting orders to Samsung to spread the wealth so Samsung is asking for 20% more money for what they are making to make up one of the lost income

And the winner is ... TSMC.

I think at this stage Apple would rather pay a lot of money to TSMC than less money to Samsung. A year ago Apple would have said to TSMC "We pay X dollars to Samsung for ARM chips. Can you do it for less?" Today they would ask "We pay X dollars to Samsung for ARM chips. Can you do it for not much more?"

If the 20% story had been true (which nobody knows, really), they would say to TSMC: "How much does it cost to build the ARM chips that we need?". And with the HTC settlement I wouldn't be surprised if they added "And how much for a few more million Apple-designed chips for HTC, so they can stop buying from Samsung".

Originally Posted by JAT

Why on earth would people go to all that trouble? Sounds suspiciously close to "Einstein's" definition of insanity.

If you want to be believed. For example, if you are a whistleblower talking about evil things some company does, that company may find employees willing to claim that you are lying. You can raise the stakes: It is much harder for them to find someone willing to lie for them if they risk going to jail.

[Krazy Bill]

A counter-rumor!

But more importantly... I just found 83 cents in the sofa cushions!

[wordoflife]

Originally Posted by LeandrodaFL

I dont get this, wasnt the AX6 Apple's entire creation? They should stop buying from Samsung

To my understanding, Apple designed/developed it ... but Samsung is the one who actually manufactured to Apple's specifications. Opposite of Apple having to chose from a set of available processors on the market...

[AZREOSpecialist]

MacDrama.com?

[Builddesign]

Have you seen the new refrigerator?

[Sora]

Originally Posted by iGrip

Apple plays the media like an accordion.

Looks like the show is starting right on time today.

[Radio]

Originally Posted by MonkeySee....

Ahh yes. This is Apples fault.

*grabs popcorn and a bean bag*

Yes u guys need to back on Samsung

They're the good guys here.

They are the brains behind our gadgets.

Powered by Samsung designed in California.

You remember that!!!! (Points finger at forum's face)

[fertilized-egg]

Originally Posted by Patriot24

I'm not so sure. If Samsung does decide to gouge Apple, it will be a short-term play that will only last as long as it takes Apple to move to TSMC or other supplier.

What is Samsung going to do when their #1 customer walks out the door for good? It is a delicate dance.

I don't think too many here read the actual Korean article and I can't blame them as the Google translate doesn't work too well for it. It says the VP of the memory supplying division was demoted because he lost much of the Apple business by not giving in to the pricing pressure from Apple.

The article also quotes Samsung people that Samsung relies much too heavily on the Smartphone business and to diversify their income portfolio they need to keep other parts of electronics business up, which means they should try to keep the Apple business.

At the end we're not sure if this article is true, but do not forget that even in the same company, there are many divisions that work for their own profits, not another division. Those Samsung employees who work on memory chips do not get bonus based on Samsung smartphones, and allegedly a Samsung memory VP was just sacked because that division wasn't doing too well. So it does make some sense that we get conflicting reports out of that company.

[Limboistik]

Did I not call this as an attempt to manipulate stock value before the Q1 earnings call?
Oh wait.

[Peppa]

Originally Posted by Patriot24

I'm not so sure. If Samsung does decide to gouge Apple, it will be a short-term play that will only last as long as it takes Apple to move to TSMC or other supplier.

What is Samsung going to do when their #1 customer walks out the door for good? It is a delicate dance.

I didn't say I was sure. But I wouldn't be surprised. Samsung will probably keep doing just fine and sell their supply to other companies...I'm guessing it would take time for Apple to find a dependable supplier...so yeah raising prices would probably benefit Samsung in the short-term when their relationship is going down the tube anyways. And raising prices doesn't necessarily mean gouging...but I can see your terminology shows a biased favoring of apple so I'm playing a losing game.

[fertilized-egg]

Originally Posted by Peppa

I didn't say I was sure. But I wouldn't be surprised. Samsung will probably keep doing just fine and sell their supply to other companies...I'm guessing it would take time for Apple to find a dependable supplier...

So it'll be easy to find buyers but not suppliers? I don't know about that. RAM is really cheap these days and it's mostly a commodity now. The article says one VP was demoted because he lost the Apple business.

Originally Posted by Peppa

I can see your terminology shows a biased favoring of apple so I'm fighting a losing game.

And you're showing a biased dis-favoring of Apple.

[KPOM]

Originally Posted by mattraehl

Well, "the beginning of the year" is pretty soon, perhaps the 20% corresponds to what Samsung is looking for next year. I assume negotiations are underway.

That might also be why they said that prices couldn't be raised easily. My guess is that there is a multi-year contract that sets out normal price changes each year (perhaps based an index), or a range of possible price changes. Samsung is probably disputing this report because a) analysts would be using it to project Samsung's own earnings, and b) other customers might get spooked if they think Samsung is about to lower the boom on them, as well.

[everything-i]

Originally Posted by iGrip

Apple plays the media like an accordion.

Tin foil hats, don't leave home without one

[WilliamLondon]

When this was reported it seemed at the time to be very strange that Apple would enter into a contract which allowed the other party to raise prices at that level without some serious conditions being met that benefited Apple in some way. It's just basic negotiating, which I'm sure Apple does very well - most big companies do. Even if the price increase actually happened, it's very unlikely Apple was such a victim - they wouldn't allow it I would imagine.

[KPOM]

Originally Posted by gnasher729

And the winner is ... TSMC.

I think at this stage Apple would rather pay a lot of money to TSMC than less money to Samsung. A year ago Apple would have said to TSMC "We pay X dollars to Samsung for ARM chips. Can you do it for less?" Today they would ask "We pay X dollars to Samsung for ARM chips. Can you do it for not much more?"

They might not be that transparent. They might ask TSMC for an offer, or may just quote a price they are willing to pay without revealing how much Samsung is getting. If TSMC knew how much Samsung is getting, that would effectively set a "floor" for negotiations with Apple.

[Peppa]

Originally Posted by fertilized-egg

So it'll be easy to find buyers but not suppliers? I don't know about that. RAM is really cheap these days and it's mostly a commodity now. The article says one VP was demoted because he lost the Apple business.



And you're showing a biased dis-favoring of Apple.

No, it will probably be a loss for both companies. And no I wasn't. Pointing out that apple should hold on to a good supplier is not dis-favoring apple. I have an Apple computer with samsung parts. I want their computers to be dependable and samsung's parts have helped do that. It's not crazy for prices to increase...do you even know if there is a cyclical price increase that has nothing to do with politics? No. None of us really know what the f is going to happen, so let's stop acting like experts and get off high horses.

[vladi]

Originally Posted by KPOM

They might not be that transparent. They might ask TSMC for an offer, or may just quote a price they are willing to pay without revealing how much Samsung is getting. If TSMC knew how much Samsung is getting, that would effectively set a "floor" for negotiations with Apple.

You think they don't know? It's a small world out there. As a matter of fact nobody doesn't need to tell them anything there are people who do the math for those kinds of things. But I am pretty much sure that somebody has told them already.

[Macdick]

Bussiness is bussines! dont take it wrong way!

[everything-i]

Maybe it's an overly cynical view but this just looks like more 'news' to manipulate stock prices. It's clear there is a lot of FUD in the air at the moment aimed at pushing Apple stock prices as low as possible before Q4 results when there will likely be a rebound.

[Popeye206]

Yawwwwnnn.....

In other news, milk prices in Apple cafeteria's will rise by 20% next year.

Can't we get some good Apple TV rumors or something going?

----------

Originally Posted by everything-i

maybe it's an overly cynical view but this just looks like more 'news' to manipulate stock prices. It's clear there is a lot of fud in the air at the moment aimed at pushing apple stock prices as low as possible before q4 results when there will likely be a rebound.

bingo!

[Patriot24]

Originally Posted by Peppa

I didn't say I was sure. But I wouldn't be surprised. Samsung will probably keep doing just fine and sell their supply to other companies...I'm guessing it would take time for Apple to find a dependable supplier...so yeah raising prices would probably benefit Samsung when their relationship is going down the tube anyways. And raising prices doesn't necessarily mean gouging...but I can see your terminology shows a biased favoring of apple so I'm playing a losing game.

My terminology shows bias toward common sense. Apple has other options for chips. Samsung does not have another Apple out there that they can simply replace the lost orders with.

There is always room for negotiation come contract time, but Samsung doesn't hold the keys to the car as many have suggested. Samsung needs Apple more than Apple needs Samsung at this point.

TSMC is in line for chips. Sharp, LG, and others are in line for panels. Is Microsoft going to place enough orders for chips and panels to fill the void of Apple leaving Samsung? No.

[TrentS]

With an overabundance of money in which Apple has said in some cases, "We don't know what to do with", why don't they use some of that cash flow to build their own computer chip making factory?! If it is too labor costly to locate in the USA, then build it down in Mexico, where I'm sure plenty of Mexicans would then choose to remain in Mexico, and work at this new Apple factory, as opposed to going thru plenty of risk to get into the USA illegally.

Heck, they could make computer chips on one side of the plant, and nacho chips on the other side! Best of both worlds! "Apple Chips!"