Apple Set to Become Samsung's Biggest Customer With $7.8 Billion in Contracts

MacRumors

macrumors bot
Apr 12, 2001
7,165
8,352
0
19
www.macrumors.com





Dow Jones Newswires briefly reports on an article from the Korea Economic Daily claiming that Apple is set to sign contracts that would see Samsung providing $7.8 billion in parts for Apple's mobile devices this year, making Apple the Korean company's largest customer.
The paper also said that Samsung will supply Apple with liquid crystal displays, mobile application processors and NAND flash memory chips used for the U.S. company's iPhones and iPads.

If the contract pushes through, Apple will become Samsung's largest customer, the paper added.
The Apple-Samsung relationship is an interesting one, given its size and the growing competition between the two companies with devices such as Samsung's Galaxy Tab and Android-powered smartphones going head-to-head against the iPhone and iPad.

Samsung has long provided an array of parts for Apple's iOS devices, including displays, flash memory, and even Apple's A4 chip. The company's Super PLS display technology has been rumored to be under consideration for use by Apple in upcoming iPad models, although Apple has also been rumored to be locking in multiple other vendors for displays for upcoming devices.

Article Link: Apple Set to Become Samsung's Biggest Customer With $7.8 Billion in Contracts
 

lilo777

macrumors 603
Nov 25, 2009
5,144
0
0
This shows who is a real tech giant. This dependency does not look too good for Apple as sometimes Samsung reserves the best products for their own products.
 

CrackedButter

macrumors 68040
The relationship is not that interesting, or surprising for that matter, its just business. If Apple only bought components from those it didn't compete with in anyway whatsoever, Apple wouldn't have much of a product to bring to market. Most rivalries, like this post suggests, are exaggerated by the media.
 
Wow, the largest customer for the largest company in Korea. That IS big. :)
It is the largest company in Korea BECAUSE Apple is growing the size of the pie not just portioning it, and sourcing a large amount of stuff from them. Take note well that even Samsung cannot satiate the desires and production of Apple. Apple needs at least 4 display vendors and 3 flash vendors to keep this train rolling.

Rocketman
 

Žalgiris

macrumors 6502a
Aug 3, 2010
934
0
0
Lithuania
This shows who is a real tech giant. This dependency does not look too good for Apple as sometimes Samsung reserves the best products for their own products.
Just like Samsung depends on many companies too. That's just business.
 
Last edited by a moderator:

dacapo

macrumors 6502
Jan 25, 2010
403
10
0
Interesting. Can anybody think of another situation where two competing device manufacturers are in a parts deal similar to this one?
? I think it's much more common than we normally think.

Case in point: the iPhone uses Toshiba memory. Apple sells the Macbooks. But so does Toshiba. They compete yet cooperate too.

Back in the 90s they used to call this phenomenon 'co-opetition' or something like that. It was relatively new at the time, but it can be found all over the place nowadays.

Having said that, a company should always be careful about this kind of strategy. Borders (which is on the verge of bankruptcy any minute now), for example, had outsourced its online business to Amazon (of all companies!) in the early 2000s. Now that was a bad move.
 
Last edited:

chrmjenkins

macrumors 603
Oct 29, 2007
5,313
154
0
CA
I'm curious about the technology sharing impact of this. If you'll remember, the Hummingbird processor in the Galaxy S phones is essentially Apple's A4. However, we know that the new Samsung SoC (Orion) relies on ARM's Mali GPU. However, Apple's 4.3 software contains references to ImgTec's SGX543 GPU. So, perhaps they still supply the SoCs, they are just custom designed by Intrinsity?
 

Slurpy2k8

macrumors 6502
Feb 26, 2008
383
0
0
This shows who is a real tech giant. This dependency does not look too good for Apple as sometimes Samsung reserves the best products for their own products.
Uh, I doubt that. I'm pretty sure they would regret pulling the wool over Apple's eyes or giving them 2nd rate stuff- you do realize how much money Apple is pumping into Samsung? They're not gonna pull **** to jeopardize that.
 

Horus

macrumors regular
Mar 5, 2009
162
0
0
Do you know what this means right?
Samsung is making far more money with Apple than with its shittie consumer devices like the Galaxy family.
 

johnnymg

macrumors 65816
Nov 16, 2008
1,315
2
0
I know that Apple has to deal with Samsung but I don't trust them. Sammy will be leveraging Apple's $'s for their own nefarious use. i.e. to go after the same markets that Apple is in.

cheers
JohnG
 

Pigumon

macrumors 6502
Aug 4, 2004
441
1
0
My Samsung TV my parents bought for my Commodore 64 (instead of an APPLE II :p) in 1982 is STILL working to this day.

Samsung makes some of the best hardware and some of the WORST software/ UI.

As long as APPLE is doing the design, software and interface this will be a great combination.
 

dba7dba

macrumors 6502
Oct 16, 2008
421
1
0
Near Apple
Interesting. Can anybody think of another situation where two competing device manufacturers are in a parts deal similar to this one?
Sure. Not sure if the article mentioned it but Apple just became the biggest customer of Samsung, and dethroned Sony from the top. Yes Sony used to be biggest consumer of Samsung products (components).
 

Tones2

macrumors 65816
Jan 8, 2009
1,471
0
0
I hope some of those NAND flash chips that Apple is buying are 64 GB ones. :)

Tony
 

lilo777

macrumors 603
Nov 25, 2009
5,144
0
0
Uh, I doubt that. I'm pretty sure they would regret pulling the wool over Apple's eyes or giving them 2nd rate stuff- you do realize how much money Apple is pumping into Samsung? They're not gonna pull **** to jeopardize that.
If it was that simple. Apple can not afford not to buy from Samsung because they would not be able to buy many components elsewhere. Samsung is the largest manufacturer of stuff like LCD panels, RAM etc.
 

dba7dba

macrumors 6502
Oct 16, 2008
421
1
0
Near Apple
I'm curious about the technology sharing impact of this. If you'll remember, the Hummingbird processor in the Galaxy S phones is essentially Apple's A4. However, we know that the new Samsung SoC (Orion) relies on ARM's Mali GPU. However, Apple's 4.3 software contains references to ImgTec's SGX543 GPU. So, perhaps they still supply the SoCs, they are just custom designed by Intrinsity?
I think you have it Backwards.
Apple's A4 is essentially the Hummingbird processor. A4 is a derivative of Hummingbird processor codeveloped by Samsung and Intrinsity.

2009.8.3
http://www.mydigitallife.info/2009/08/03/samsung-and-intrinsity-collaboration-on-1ghz-hummingbird-arm-processor-for-mobile-market/
-excerpt-
Samsung and Intrinsity Collaboration on 1GHz Hummingbird ARM Processor for Mobile Market
---

2010.4.17
http://arstechnica.com/apple/news/2010/04/apple-purchase-of-intrinsity-confirmed.ars
-exceprt-
Apple has indeed bought Intrinsity.
---


Apple is a great company but I'm pretty sure they didn't invent A4 or ARM or GUI or mouse.

I guess there's a reason Apple keeps buying A4 from Samsung, perhaps due to contractual agreement between Samsung/Intrinsity and perhaps Samsung already knows how to make them.
 

theosib

macrumors member
Aug 30, 2009
72
8
0
Win-Win for Samsung

Yes, Samsung would like the Galaxy Tab to succeed. But in a way, it doesn't hurt them if it doesn't succeed, because its failure will be Apple's success, which they also profit from.

There are other situations where the profit motive doesn't seem as clear. For instance, Mac versions of Microsoft Office. Mac is a competing platform, and the Mac version of Office is a small portion of MS's over-all Office sales. Nevertheless, they still do it. In theory, Microsoft might make more profit from reallocating their Mac BU resources to Windows products. (On the other hand, a diverse product base keeps you from putting too many eggs in one basket.)