Report: Samsung Now Charging Apple 20% More for iPhone Processors
November 12, 2012 12:36 PM
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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
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.
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RE: Fruity Karma
11/12/2012 3:08:17 PM
In reality, though, Apple got free 1 year chip supply from Samsung. Basically Samsung will be paying themselves (on behalf of Apple) for $1B worth of chips.
That is short term victory... presuming that jury verdict will stand, which I hope will not; I'm not too fond of Apple tactics, and they do deserve a few good smacks (I don't think they will become really reasonable before they get something not unlike MS treatment).
Long term, well. It all depends on when/if Apple will find another manufacturer... and if that manufacturer will manage to be at least as competitive as Samsung is, both in terms of pricing and volume.
For me, it doesn't seem like Apple thought this through. But then, they do act incredibly arrogant these days. It seems same marketing that was douchebaging their customers in recent years did influence their management, even their legal team...
"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch
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