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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 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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LOL - would have raised it quadruple
By TheJian on 11/13/2012 2:14:53 AM , Rating: 2
Why 20%? You know they can't get 130million processors anywhere else. I'd have quadrupled the price and told them good luck getting your product past that 1hr launch you had when you ran out...ROFL.

Oh by the way, while you take the next few months tooling up a new supplier we'll be selling the heck out of our Samsung Galaxy S3 now & S4 soon.

Can you imagine no chips for months for Ipad4/Iphone5? You refuse to pay you take months to come up with a replacement. Samsung won't get another chance to do this once Apple is TSMC etc tooled up. You only get one chance to make them get 1/4 the profits for a while. No phones or tablets would kill their bottom line for months. You may take a small hit, but once nothing is on the shelves for xmas, you're stuck buying nexus 10's and Galaxy phones etc. EVERYTHING BUT APPLE. People who get used to android (forced there by no apple crap) may never come back. There is a portion that would be hard to get back forever once everyone gets a taste of cheaper freedom. Everything android would sell a LOT more for xmas.

I'm thinking 20% was FAR to little. With apple out samsung would probably make 16bil next quarter instead of 8B. Much more money in the coffers for the coming war with 100bil cash company. They should cut them off at the knees now. I may have to produce your chips due to contract, but apparently I can charge whatever I want. BEND OVER CRAPPLE :) Bite the bullet samsung and screw them while you have the chance before they tool up at other fabs. You may get 2 quarters of screwing them out of it, giving you time to replace production with Kepler/denver/boulder chips (and whatever you throw at others like nexus 10). Android already outsells apple 2 or 3 to 1 (based on activations). With no apple it becomes 100 to none right? :) Only lasts 3 to 6 months but that's more than enough time to HURT them and collect everywhere while weakening their future vs. yours.

Ruthless? That's just good business ;) Apple gets no return on A6 R&D then since by the time the retool at TSMC etc that would be old tech. You screw their sales. You screw their stock. It would surely tumble some on no phones/tablets for 6 months news - a fair amount of people would EXIT quickly. You lower their market cap doing it, which in turn lowers ability to fund tons of R&D to kill you etc...The benefits list goes on and on. Unless they are contractually unable to raise above 20%, this move is NOT NEARLY ENOUGH. It would surely teach apple a lawsuit lesson which would be taught throughout colleges everywhere in the future. Sue for a billion and it may cost you 15-20B in the next 6 months...ROFL. Or would that be more than 20B? It's a LOT thats for sure based on current profits and how much of that is purely mac money. Take phones/tablets out for 2q's and they get seriously hurt for a time.

Income is 40B over last TTM and rising 60% YOY. So you could argue for at least $20B losses. A brilliant move if sammy has the guts. Personally I'd have made the move the second I saw 20million in sales on the galaxy S3. But I guess I'm FREAKY RUTHLESS...LOL. Samsung would probably pocket 20B during the same time. They already make 8B/Q now. Remove apple and boom, you take their profits as nobody else sells 20mil phones in 100days.

“We do believe we have a moral responsibility to keep porn off the iPhone.” -- Steve Jobs

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