Print 70 comment(s) - last by Xplorer4x4.. on Nov 17 at 3:34 PM

Samsung hikes up prices on Apple

The legal battles between Samsung and Apple have reached near legendary proportions. Apple won a major decision against Samsung in U.S. courts where the jury awarded Apple $1 billion in damages. Samsung is appealing that ruling and is even trying to get the case thrown out of court by alleging juror misconduct.

Apple lost a patent infringement suit against Samsung in Europe and was forced to run apology ads in major publications stating that Samsung did not copy the iPad.
Reports are now coming in that Samsung Electronics has recently raised the price it charges for mobile processors to Apple. Samsung supplies the processors for the popular Apple iPad and iPhone.

According to a source claiming to be familiar with negotiations between the companies, Samsung increased the price of processors it provides the Apple by 20%.

"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.)"

Apple was, understandably, was unhappy with the price hike and initially refused to pay it. However, it came back and agreed to pay the additional costs when no alternative provider could be found.
The source also says that Apple buys all of its application processors from Samsung and purchased an estimated 130 million units last year. The source also estimates that Apple will purchase over 200 million application processors from Samsung this year.
One last tidbit the source noted was that Samsung has a long-term contract to provide the application processors to Apple that runs through 2014. Neither Apple nor Samsung have officially commented.

Source: Market Watch

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RE: Oh! Irony
By NellyFromMA on 11/12/2012 12:56:41 PM , Rating: 1
Boom! I get a decent amount of enjoyment knowing that Apple didn't prepare for this or even see this coming seeing as how they both relentlessly pursued attacking Samsung on multiple legal fronts, but also because it shows a chink in the armor of an otherwise impenetrable dominance Apple maintains on various supply chains.

Too funny that Apple tried to find an alternative but ultimately had to capitulate. I wonder if Samsung could have faced any types of penalties if it say wanted to price gouge by 30 or 40%?

I assume they would not have been able to, but just wondering if 20% was the sweet spot because of regulatory reasons or just based on market realities.

RE: Oh! Irony
By frobizzle on 11/12/2012 1:08:44 PM , Rating: 4
What does it matter? Apple will simply pass the additional cost on to the consumer and the drones that buy Apple no matter what, will happily pay the additional price for the joy of having an Apple product.

RE: Oh! Irony
By Mint on 11/12/2012 1:21:19 PM , Rating: 2
I seriously doubt that Apple will risk alienating customers by raising prices (or, alternatively, that they would have reduced it with a cheaper chip). This is coming straight out of Apple's fat margins.

RE: Oh! Irony
By NellyFromMA on 11/12/2012 2:57:46 PM , Rating: 1
Evidentally I was down rated for asking a question that involved too much thought that deviated from 'can it play crysis' jokes. Somehow, I'm ok with that...

Anyways, I don't really get all worked up in the 'Apple must be punished beyond repair' or the 'Android is the best OS despite any of its actual flaws' stuff that happens on these forums for better or worse.

As far as consumers go, Apple was never a brand you went to for cost-value, or even for value parity (that is, actually getting what you pay for).

No, Apple is the brand people seemingly gravitate to when cost seemingly is not a variable in value. So, as far as the effects on consumers go... there are plenty of better alternatives from both a functional and cost perspective so I guess I don't feel one way or the other on that. It's not any different before as it will be after. It's still the brand you pay more for to get less of regardless of whether the cost gets passed down to consumers or not.

I only get annoyed about consumer circumstances when there are no viable alternatives.

"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch

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