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Apple Reportedly Relying More Heavily on Samsung for iPhone 6 and Apple Watch Components
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AMD and Qualcomm are design and marketing companies dependent upon others to make parts they like, too.
Apple is big enough where it could purchase its suppliers outright, either for cash or stock. There's a reason it chooses not to. There are advantages and disadvantages to vertical integration. By outsourcing, they let other companies worry about the R&D and can pick and choose among suppliers. It just so happens that Samsung is a very good supplier. But they aren't the only ones, and the existence of TSMC, Toshiba, LG, Sharp, and others helps make sure that no one supplier becomes complacent.
Yeah, Samsung's operating profit totaled only 4.06 trillion dollars this quarter.
Definitely in the toilet... I mean, seriously, who can survive on only 4.06 trillion dollars?
How is it reaching? It's a fact that Samsung's profits are falling, primarily because the mobile division, which had been the driver of Samsung's profit growth, is faltering. It may well be no accident that Apple is awarding more business to Samsung at just this time. Samsung may have well made some concessions in negotiations to win business that Apple could have given to others.
Apple is using TSMC as a chip supplier this year. That's a fact. So Apple has at least one viable alternative to Samsung for chips. LG and Sharp make displays, giving Apple 2 alternatives. Samsung knows this. Sure, historically they have had many advantages over other Apple suppliers, but they aren't the only player in town.
I think a lot of people made too much of the lawsuit. Apple v. Samsung was more of a personal grudge of Steve Jobs that Tim Cook inherited. Apple probably could have gotten more money through licensing (which Microsoft did) than through the lawsuit, and from early on it was quite clear that courts were reluctant to impose product bans. I think it was more the principle of things as to why Apple carried forward with the lawsuits. They got their "win" in 2012, but now that Apple has plugged the gap in its product line with the iPhone 6 and 6 Plus, and Samsung's mobile division is facing pressure from both the top and bottom, they are approaching their relationship with Samsung more rationally.
Samsung is profitable on selling components to Apple to subsidize their own competing mobile divisions inability to be profitable?
Actually, I think the irony is that without Samsung, Apple wouldn't have an iPhone product or an Apple Watch. They definitely wouldn't have the iPhone 6 Plus without them.
I think you are off by a factor of 1000. That was 4 trillion won, or about 4 billion dollars. That's about 1/3 what Apple made last quarter, or what Samsung made in the same quarter a year earlier. If you don't think that's a problem, then you don't know much about operating a business.
Samsung is taking a big cut this quarter because Apple basically copied their Galaxy Note line of devices with the iPhone 6 Plus and took back a lot of customers who have wanted bigger screens for years.
Samsung just needs to step it up next year. This is what happens with a company like Apple, who has more mobile customers worldwide, decides to take one of your best-selling product and copy it for themselves.
I'm not at all surprised Samsung took a hit. The Galaxy Note is what differentiated them from Apple.
Without Apple, Samsung would be losing money right now, and might not even have a mobile division.
Just because a company doesn't manufacture its products doesn't mean that they have no value. To the contrary, sometimes the value is in the design. For example, Samsung is great at manufacturing 64-bit chips that others like Apple or Qualcomm design, but struggles with designing chips (its Exynos line of processors use more power and aren't as fast as designs from Qualcomm or Apple). You can have all the fabs that you want, but if no one is buying from them, they have no value.
The fact of the matter is that Samsung needs Apple just as much as Apple needs Samsung.
Except that Samsung's drop in profits started 4 quarters ago, a full year before the iPhone 6 Plus came out. Also, arguably Samsung basically copied the iPhone back in 2011 and 2012 (at least that's what a court in California said), but Apple never experienced a drop in profits of 75%. Flat profits in 2012 and 2013 had analysts and activist investors calling for Tim Cook's head. But now they are on the rise again.
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Samsung has outsold Apple 2-to-1 in terms of unit for the last 2 years. And the product they "copied" wasn't even Samsung's top seller.
The larger issue with Samsung is that it is very difficult for any Android OEM to differentiate itself for very long, since Google develops Android and controls access to Google Play. Even after Samsung copied Apple back in 2011, Apple still witnessed sales growth (albeit perhaps less than if Samsung hadn't released the Galaxy line), largely because iOS is a unique ecosystem. But it's easy to switch from Samsung to LG, Lenovo, or increasingly Xiaomi since everyone has access to the same Android. Samsung tried to differentiate by adding features on top of Android, and for a while they were successful in occupying the only profitable segment of the Android market, but competition is heating up.
exactly what part did Apple copy from Samsung from the looks of it my iPhone 6+ looks like a larger 5S.
The truth is Samsung has been buying marketshare for a long time and now it's catching up with them to add insult to injury the Chinese OEMs are really stepping it up.
You know what they say?
A trillion here, a trillion there...pretty soon it starts adding up to real money!
Without Samsung Apple is nothing and wouldn't be able to offer anything...No Iphone...No Iwatch...no Ipads...
Wrong, if Samsung was not in the picture at all, other companies would race to the opportunity to provide Apple the parts they need.
You may want to check your numbers. You are confusing US dollars and South Korean Won. 1,000 Won = $0.905. So that's about $3.6 billion dollar. Used to be three times as much, so Samsung's business strategy seems to be badly failing.
Did you seriously think Samsung's quarterly profit would be enough to buy all of Apple's shares six times over?
When you pretend you know better than others you _really_ must avoid embarrassing mistakes like getting financial numbers wrong by a factor 1,100. Seriously, didn't you think 4.06 trillion dollars was a bit much? You know the difference between a billion and a trillion, right?
PS. Samsung's "Mobile Division" profits did indeed drop by 70%, so the four people who voted that post of yours up need some serious fact checking.
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Simple answer: because Samsung's products aren't Apple's products, no matter internal components.
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I'm still not happy at all with Apple using TLC NANDs on an high end device.
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Apple IS an hardware company and always have been.
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Apple copied Galaxy Note....
Seriously dude ....
Best joke of the month
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Actually Samsung needs Apple, not the contrary.
