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: Oh! Irony
11/12/2012 11:08:30 PM
I seriously doubt Apple will be getting into the supply and manufacturing business anytime soon.
If it isn't obvious Apple makes their fortune on the backs of other "less privilaged" nations, then I don't know what to tell you. The problem is that S Korea is becoming the next Japan as far as electronics and manufacturing so the price parity is closing.
Apple will eventually move more of their supply chain to China, Taiwan, Thailand, the Phillipenes, etc. I wouldn't be surprised if they begin outsourcing software production to India.
Apple is an entirely imported profit corporation, that is, the majority of their products are composed of imported materials, but the majority of their income in from domestic sales. This is in stark contrast to Intel, an export profit corporation, who produces the majority of its products in the United States, but the majority of their sales and income is from exports.
RE: Oh! Irony
11/13/2012 12:04:30 AM
You know, I still have a hard time understand how a business like Apple affect our trade balance. The iPhone is made in China, and we count it as an import? But reports after reports show that the suppliers and factories only profit tiny portion from the revenue of the iPhone sales. Apple is the company that makes a huge profit from the sales, and it's an American company. Do we count the iPhone sales oversea as export?
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