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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By Tony Swash on 11/12/2012 12:58:39 PM , Rating: -1
That was the sound of Samsung slamming it's own dick in the door just to spite Apple.

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 must be quaking in their boots especially given they are so far along the road of severing chip dependencies on Samsung and building their own bespoke silicon. I guess Apple can console themselves with the $8 per handset that HTC are going to be paying them after HTC's surrender in the patent lawsuits.

Samsung will miss Apple more than Apple will miss Samsung. The cash has flowed from Apple to Samsung not the other way round. That cash will stop flowing over the next couple of years. It's already impacting samsung.,2817,2411825,

RE: Ouch!!
By EasyC on 11/12/2012 1:33:35 PM , Rating: 5
Apple has a lot of problems to worry about before building their own chips... which is why they are swallowing it and paying Samsung. The courts are wising up to their legal games and starting to push back. Should Apple continue its abuse of the legal/patent system, they will find themselves in a lot of legal trouble... or be made example of (which I hope). They just fired the iOS guy which, lest I remind you, is their #1 moneymaking OS (regardless of it being severely outdated). There's division among the ranks as to which direction to go in. They've lost vision on products (their last two products - iPhone 5 & iPad mini - were "me too" products). There was nothing innovative or boundary pushing about them. They've lost their lead in market share and it's not a trend that appears to turn around anytime soon. Oh and their stock is going down faster than a 10$ hooker with a 50$ bill in your pants.

... so having to build and deploy it's own chip foundry isn't exactly easily tackled given Apples current plate. Samsung knows this, and is finally slapping Apple like the red headed stepchild it's become. In the sales industry, we call that an A$$hole Discount.

RE: Ouch!!
By Tony Swash on 11/12/12, Rating: -1
RE: Ouch!!
By Cheesew1z69 on 11/12/2012 3:24:12 PM , Rating: 3
Keep strokin that Apple dick dude... they must pay you well.

RE: Ouch!!
By Tony Swash on 11/12/12, Rating: -1
RE: Ouch!!
By Cheesew1z69 on 11/12/2012 3:37:27 PM , Rating: 3
/me rolls eyes..

That's the best you have? Go figure.

RE: Ouch!!
By Cheesew1z69 on 11/12/2012 3:51:15 PM , Rating: 3
It's simply amazing how pathetic you look when you post.

RE: Ouch!!
By ritualm on 11/12/2012 3:58:52 PM , Rating: 3
Apple has devised a contraband a trillion times more addictive than 100% pure cocaine.

It's called iTunes.

RE: Ouch!!
By maugrimtr on 11/13/2012 11:02:31 AM , Rating: 1
I really admire Tony. His ability to suspend reality is breath taking. For example, the idea of the iPhone 5 being the best selling handset is inherently nonsense. Android is outselling iPhones year after year at this point so they, not Apple, have the majority of market share. Apple can no longer compete on technical specifications or for fab capacity the way it could years ago - it's no longer those fabs' supreme customer.

Also, Apple has still not managed to diversify it's products. It's one pillar to success (another being innovation/relevance as Sharp/Panasonic/Sony are learning to their detriment). What other niche can Apple now move into? Where does it go beyond iPads?

Answer? Nowhere. Que selling of Apple stock as reality bites in... Oh, yes, and that is already reality - Apple stock is heading downhill these days from its overinflated pumped up high.

RE: Ouch!!
By ritualm on 11/12/2012 3:55:13 PM , Rating: 3
Lets slip back into the real world and rational discourse shall we.

Former FRB chairman Alan Greenspan once warned about "Irrational exuberance" in the stock market. Every last one of your comments is proof of your wrongful misguided optimism of everything Apple.

Now let's dissect your foundation of lies.
The only way Apple will be beaten is if other companies can make products that are more attractive than Apple's and sell them in very large numbers across the global markets number and at a profit.

Except this is wrong. You do not need to sell your products at a profit to secure significant market share. Microsoft and Sony did exactly that with their Xboxes and PS3s, by selling those consoles initially at a hefty loss. In fact MS could throw money at its money-losing Xbox division for years simply because it could.

There is nothing stopping Apple from selling its iCrap at a loss for a year or two - the company has more immediate cash reserves than the Obama Administration.
The only way to slow down Apple's growth, let alone beat them, is in the market.

There is a surefire way to crash the Apple train: kill its supply lines. Stalin did that against Germany's eastern front in WWII and forced Hitler to go defensive. Considering Apple manufactures nothing in-house, there is more than one way to choke its assembly line.

A little snowball rolling down a hill at the top of Mount Everest becomes a landslide several miles below. A 20% cost increase in smartphone/tablet SoCs and severing the display contract are just the beginning.
Their last two products, the iPhone 5 and the iPad Mini, will be respectively the world's top selling handset and tablet in the next quarter and for most of next year.

Here is another aspect that you are not personally aware of: the iPhone 5 and the iPad Mini are the biggest causes of crime in the United States. Their high resale values are tantalizing money spinners for Knockout King participants and amateur scammers.
They are selling as fast as Apple can make them across the world markets, they are very profitable for Apple.

That's why any disruptions in the supply lines will ultimately hurt Apple.

Steve Jobs vowed nuclear holocaust with everyone on the Android camp. He was wrong. The correct term is nuclear winter. Losing and breaking supply contracts for Apple won't necessarily destroy Samsung, but the flip side is devastating for Apple. TSMC is not willing to suck the milk off Tim Cook's left tit in exchange of an exclusive supply contract, that's two major foundries out of Apple's radar.

Whose sane company will make chips for Apple, knowing that Cupertino is more delicate and fickle than the Northeastern US weather patterns of late and willing to "cut the hand that feeds them"?
On the legal front Apple's long legal war of attrition is moving ahead, the most recent victory over HTC was a step forward.

Mutually assured destruction. HTC is in a irrecoverable downward spiral, and Apple just kickstarted its own decline. One step forward, 99 steps back, good work mongoloid.
If anybody in trouble with the regulators it's not Apple

If anybody in trouble with CONTEMPT OF COURT it's not Android :)

Keep 'em comin, anti-heterosexual internet gangster. I'd love to use remote-iPhone-controlled B-stock OCZ power supplies as bomb material against the likes of you zombie hordes.

RE: Ouch!!
By Tony Swash on 11/12/12, Rating: -1
RE: Ouch!!
By cyberguyz on 11/12/2012 1:33:33 PM , Rating: 2
Time will tell Tony. Time will tell.

We will see whose dick ends up stunted.

RE: Ouch!!
By XZerg on 11/12/2012 2:44:07 PM , Rating: 1
3-4 years at minimum to get the fab going and producing at a decent yield. by then the entire industry would have moved on to the next generation manufacturing: 450mm wafers + FinFET. IIRC optical communication is right around the corner of that - 2016-2018...

There is a limit to vertical integration and going beyond a certain point can fracture the entire business model for various reasons such as over-commitment in one section or under-performance in another...

Apple, if they do launch a fab, it may be for many years specifically used for smaller basic i/o chips rather than doing processors. If and when they master it and catch up to the rest of the fab industry on technology nodes, may jump on to making cpus. So maybe a decade or so away.

“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith

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