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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Oh! Irony
By amanojaku on 11/12/2012 12:42:47 PM , Rating: 5
Thou art a heartless bitch.

RE: Oh! Irony
By Jeffk464 on 11/12/12, Rating: -1
RE: Oh! Irony
By Brandon Hill on 11/12/2012 12:47:44 PM , Rating: 5
Apple was going to jump ship anyway. Might as well fleece 'em while you can.

RE: Oh! Irony
By HoosierEngineer5 on 11/12/2012 1:52:06 PM , Rating: 5
Apple is going to find out that making chips is harder than it looks - you can't "arrogant" your way through a fab cycle.

This will hurt both comanies greatly (probably Apple more). Better to release each other's gonads now.

RE: Oh! Irony
By RufusM on 11/12/12, Rating: -1
RE: Oh! Irony
By MadMan007 on 11/12/2012 2:10:39 PM , Rating: 3
New 'spaceship' building and campus. New data centers. Not new fabs.

RE: Oh! Irony
By RufusM on 11/12/12, Rating: 0
RE: Oh! Irony
By othercents on 11/12/2012 2:59:32 PM , Rating: 5
Intel sells semiconductors, not computers. Apple sells computers, not semiconductors. There is a big difference and there is probably a breakeven point for the FAB that is well beyond what Apple needs unless they start producing their own memory.

Apple has other options, but I doubt other companies will be as flexible on meeting Apple's needs as Samsung has.

RE: Oh! Irony
By name99 on 11/12/12, Rating: -1
RE: Oh! Irony
By AssBall on 11/12/2012 4:30:51 PM , Rating: 3
For 5 billion maybe you could lose your virginity too. But, much like an aircraft carrier, that has nothing to do with the topic at hand.

If you are going to bother posting, don't forget to wipe the drool froth from your chin first.

RE: Oh! Irony
By Icebain on 11/12/2012 8:35:19 PM , Rating: 2

hate to use wikipedia, but 14 billion is a "top of the line" aircraft carrier. If you're willing to settle for "last years model" then you're a bit closer with the Nimitz class haha

RE: Oh! Irony
By Basilisk on 11/12/2012 9:24:37 PM , Rating: 3
$9B is the cost of a Ford class carrier; your price included the R&D which will be amortized over many (supposedly 10).

That $9B just let's you park it in your driveway. The life-cycle cost of one "Ford" is estimated at $35.6B (2012 USD), so make certain you have the pocket change. (This is LESS than the LCC of a Nimitz class, BTW; reduced LCC was designed into the new Fords.)

If you don't already have a carrier strike group, be prepared to lay out further bux 'cause ya can't take your new toy to the wrong side of town without some hired muscle: "A typical CSG consists of the carrier, three or more destroyers, one or two Aegis guided missile cruisers, two or three guided missile destroyers, up two attack submarines, and a combination ammunition, oiler, and supply ship." Start saving today.

RE: Oh! Irony
By elleehswon on 11/13/2012 8:39:19 AM , Rating: 2
Guys. Chill. No one's buying an Aircraft Carrier. Just....relax.

RE: Oh! Irony
By Captain Awesome on 11/13/2012 9:38:48 AM , Rating: 4
Why don't you go back under your bridge TROLL!

No one likes a Ford class aircraft carrier fanboy. They totally copied the Nimitz class anyway, which is better. If I were a pilot, or a sailor, and they put me on a Ford class carrier, I would go AWOL in the middle of the ocean. I would swim for 7 months until I came to either land, or a Nimitz class carrier.

RE: Oh! Irony
By TheJian on 11/13/2012 2:29:46 AM , Rating: 4
Not quite sure what your point is. IT takes years to build a fab. If everyone decided not to make apple stuff this would kill them for X years. TSMC has no trouble keeping fabs 100% and can't make enough (hence they could laugh off Apple/QCOM's 1Bil bid to own their production). Samsung has many options for filling their fabs now that they will probably 100% produce NV gpu's from 2013 on for a while (denver, boulder too). They would all take up slack for no apple products.

Simple supply and demand. If I can't buy an iphone5/6/ or ipad4/5, I don't wait for their fab for 3-4 years I buy a phone from someone else correct? Nobody loses but apple in this scenario and everyone involved with apple loses a WALMART like person forcing you to give a lot of the profits to them due to pricing power. A lot more friendly deals would be made between the rest of the semi's and oems and profits would be quickly growing for everyone since that money would be spread throughout the semi industry instead of making apple get to 200bil cash over the next 3-4 years from the 100bil the have now. It's a no-brainer for everyone to collude and kill them for years. Is there anyone left who hasn't been sued by them? Intel? I don't think they'd lend a hand either. Just pump out the other 10% of macs for more WINTEL's. They may even see an opportunity in phones/tablets etc for their own gear with no apple taking a lions share of a lot of gear.

For the record, Samsung has invested 13Billion in Austin TX fab with the recent announcement of 5B more matching Intel 4B announcement in 14nm. So in answer to your question, NOT MUCH. ONE FAB in 3-4yrs that you might have problems keeping full if android had free reign for 3-4years. Appstore would suffer by then with no new products to buy apps for too, and thus the whole ecosystem gets weaker.


RE: Oh! Irony
By theapparition on 11/13/2012 4:28:45 PM , Rating: 3
Then it's settled. Apple is building an aircraft carrier.

RE: Oh! Irony
By GreenChile on 11/12/2012 4:34:49 PM , Rating: 5
Intel builds new fabs all the time. A new state of the art fab with the latest process technology is said to cost upwards of $10 billion to build and furnish.

Perhaps you should rethink your 'completely dwarfs' statement.

RE: Oh! Irony
By Samus on 11/12/2012 11:08:30 PM , Rating: 5
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
By pixelslave on 11/13/2012 12:04:30 AM , Rating: 3
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?

RE: Oh! Irony
By Shadowself on 11/12/2012 2:07:54 PM , Rating: 4
Please read the DT article and the source material.

These are about negotiations on the next contract. The current contract runs into 2014.

There is no "fleece 'm while you can".

Apple is already planning on moving the vast majority of their chip production to other companies. Samsung has already stated that it will radically decrease the number of chips sold to Apple starting in the first half of 2013.

Also these are leaks about ongoing negotiations on a contract that won't take effect for well over a year from now. The final contract could be any increase at all (0% to 100% or more). The leak is that one of the parties (likely Samsung) is saying 20%.

Starting in 2014 Apple may pay 20% more for the few chips it does get from Samsung. There's nothing more too it than that.

RE: Oh! Irony
By ClownPuncher on 11/12/2012 2:18:37 PM , Rating: 2
Volume pricing.

RE: Oh! Irony
By TheJian on 11/13/2012 7:46:05 AM , Rating: 2
"The two firms have started to reflect the new supply price recently, the report added, citing the same person."

Kind of sounds like it's happening NOW not some imaginary new contract in 2014.

Got any proof. I read the article before it was even posted here and just read it again. I still don't see anything saying new contract AFTER 2014. It's affecting pricing NOW. They are only obliged to make chips to 2014, but it seems there's no defined price THROUGH 2014. Which clearly is changing TODAY with the (yesterday now...LOL) announcement of Googles Nexus 10.

Hmmm...Coincidence? Chips shift to google's device and take away from Apples. Hmmm, odd they ran out in an hour? I'm thinking the shorting on apple chips happened a few weeks or months back, which is why Apple didn't have enough to last more than an hour. They are NOT that bad at estimating sales. They just had no way to force sammy to give them more when Google probably bought quite a few of exynos5.

Fleece while you can. Until you prove it wrong :) Might want to re-read the "source material" yourself.

This is like the president saying "I said it was a terrorist act in the garden", when he really said "America won't stand for terrorist ACTS", but didn't call the one that just happened a "TERRORIST ACT" as the lame a$$ candy crowley said he did. She of course backtracked less than an hour later, but 60million people saw her tell mitt romney he was wrong and the obama was right. NOPE. Romney was right, president didn't say it. Romney should have corrected that in the first 2 minutes of the 3rd debate to let america know he lied and so did crowley. A few minutes later in that "garden" speech he again blamed the video...LOL. In his UN speech he blamed the video 6 TIMES! LOL. Sorry, you're creating meaning that isn't there, just like the prick in the white house and his little helpers the liberal media :)

Unless you can show some link that DIRECTLY says Apple isn't going to be charged this 20% extra until 2014, you're wrong. This is directly related to a better price no doubt from google to woo production from apple. Sammy has less need for apple's chips now. Google will sell this out in a week and want more. Then again, maybe they shorted apple a ton, so google will have plenty. I've been up all night waiting for it to go on sale at googleplay...ROFL. Dad wants one for xmas, but we'll settle for the u30gt w/32GB/Jellybean if forced as I don't think google will have enough of these. U30GT really does all he needs I just wanted him to get the better one. I can wait out tegra4 10inchers. Hurry the hell up google! I expected to be putting in my credit card# at 12:01 PST...ROFL.

RE: Oh! Irony
By testerguy on 11/14/2012 11:04:59 AM , Rating: 2
You shouldn't be so influenced by what you want to believe.

He was actually bang on. There has been no price hike, according to Samsung.

A Samsung official has reportedly denied claims that the company has raised the price it charges Apple for its iPhone and iPad processors by almost 20 percent. Speaking with Korean newspaper The Hankyoreh, the unnamed official added that prices were agreed upon at the beginning of each year and "aren't changed easily." Monday's report in rival paper Chosun claimed Apple and Samsung have a supply agreement that runs through to 2014, and unless "special cost factors" were involved, unit prices have traditionally stayed level.

RE: Oh! Irony
By danjw1 on 11/12/2012 3:57:41 PM , Rating: 2
Why do you think this is some sort of counter attack at Apple. Maybe it was just a normal course of business price hike. Not every action that a company takes is nefarious. There may well have been a good reason for the price increase, which is why Apple wasn't able to beat the price from other suppliers.

RE: Oh! Irony
By inperfectdarkness on 11/13/2012 3:10:52 AM , Rating: 2
it's going to be funnier than that. i can't wait to see the look on apple's face as it slinks back to samsung with its tail between tis legs after getting pwnd for trying to migrate to its own fabs.

RE: Oh! Irony
By BB33 on 11/12/2012 12:49:50 PM , Rating: 2
They may have an actual valid reason for the price hike but then again it could be they just want to screw with apple lol.
I dont know and dont really care if they shoot themselves in the foot... sucks for them.

RE: Oh! Irony
By SublimeSimplicity on 11/12/2012 1:43:29 PM , Rating: 5
They have a valid reason. Some company keeps suing them for patent infringement, someone has to pay for those judgments.

RE: Oh! Irony
By RufusM on 11/12/2012 2:02:49 PM , Rating: 2
Story 1: Apple wins $1B in patent judgement.

Story 2: Samsung charges Apple $1B more for processors.

RE: Oh! Irony
By inighthawki on 11/12/2012 3:31:14 PM , Rating: 2
That's about what I got out of it too :)

RE: Oh! Irony
By zero2dash on 11/12/12, Rating: 0
RE: Oh! Irony
By HoosierEngineer5 on 11/12/2012 1:54:52 PM , Rating: 2
I don't think nVidia has a fab. Apple needs a state-of-the-art company to work with. Right now, AMD could use a partner - they probably have good relations with Global.

RE: Oh! Irony
By Solandri on 11/12/2012 2:48:02 PM , Rating: 2
That was my thinking too. Apple could buy up AMD without even blinking. AMD's market cap is only 1.4b. Their annual revenue last year was less than Apple's profit last quarter.

RE: Oh! Irony
By Mitch101 on 11/12/2012 6:26:28 PM , Rating: 2
Unfortunately AMD would lose their x86 license if that happened. AMD no longer has FABS. But on the flip side AMD seems to lose money in the X86 war with Intel so maybe cutting off AMD x86 chip war and AMD focusing on Graphics and ARM cpu's they might become a profitable company.

Nah I like AMD chips they keep PC's low priced.

RE: Oh! Irony
By ritualm on 11/12/2012 3:24:58 PM , Rating: 2
Intel is one of the very few chip companies that also runs its own chip foundries. AMD stopped that back in 2009 when it exited the foundry business as part of the new x86 settlement between Sunnyvale and Santa Clara.

Neither AMD nor nVidia has chip foundries for GPUs, that stuff is fabbed by TSMC. Ever heard of the Radeon 5000-series shortages and Fermi problems?

RE: Oh! Irony
By amanojaku on 11/12/2012 12:55:13 PM , Rating: 3
I get that samsung is upset with apple but apple will eventually be able to find another chip maker. Why would you be willing to loose a contract for 200 million chips.
From the article
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.
Consider that Apple was already dumping Samsung. For example, LG displays that turn out to be inferior to Samsung's. Now it's looking for alternative CPU manufacturers, and can't find any.

Someone on this site once said Apple doesn't need Samsung, but the facts appear to contradict that statement. That's what you get for being just an integrator.

RE: Oh! Irony
By Brandon Hill on 11/12/2012 1:00:50 PM , Rating: 2
From what I gather, Apple wants to and WILL leave Samsung. But it can't just drop them overnight or it would disrupt their production (obviously).

So Apple will begrudgingly stay with Samsung until it can secure enough manufacturing capacity from other fabs to supply enough chips for the iPhone, iPad, and Apple TV.

RE: Oh! Irony
By MadMan007 on 11/12/2012 12:59:26 PM , Rating: 2
Foundry capacity is tight, especially for such large orders. Designing a chip that can be made on good processes at multiple foundries isn't easy, if it's even possible (chips are usually optimized for a certain process.) The only choice Apple has is to look for other foundries for their next chip design rather than trying to move a design to another foundry, but they're competing with all the other fabless companies too.

RE: Oh! Irony
By 440sixpack on 11/12/2012 1:19:51 PM , Rating: 1
Maybe they'll just use that $100 billion cash to build their own foundry. :-)

RE: Oh! Irony
By KITH on 11/12/2012 1:28:41 PM , Rating: 2
Yeah, $100 billion and a little bit of that apple magic and they can have a fab built overnight.

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.

txt 2 win
By Motoman on 11/12/2012 2:43:16 PM , Rating: 2
SaMsUnG: 20% uptick doosh

iApple: WTF!? GTFO!

SaMsUnG: lol k cya

iApple: w8

iApple: guise?

iApple: k srsly

iApple: 10%?

SaMsUnG: suck it

iApple: >:(

SaMsUnG: :O <========B

iApple: 15%

iApple: ...

iApple: ?

iApple: plz

iApple: fine. 20%

SaMsUnG: cha ching kthxbai

RE: txt 2 win
By xti on 11/12/2012 6:32:32 PM , Rating: 1
i was gonna say, the ascii weenie saved this post as being utterly useless.

RE: txt 2 win
By Cheesew1z69 on 11/14/2012 8:33:44 AM , Rating: 3
post as being utterly useless.
Like most of yours...

RE: txt 2 win
By Xplorer4x4 on 11/17/2012 3:34:16 PM , Rating: 2
Funny, I have seen an over whelming majority of your posts as nothing but flame bait lately. Granted it is typically directed at iTony, so it is not completely with out some merit, but it gets old.

Fruity Karma
By cpeter38 on 11/12/2012 12:49:32 PM , Rating: 2
Initial lawsuit results: Apple = $1 Billion if/when all appeals are denied.

Reaction: 200 Million X $20 X 20% = $800 Million cost to Apple (*pending appeals*).

Net = + $200 Million to Apple (*pending appeals*).

TBD: Juror misconduct, patent validity

Immediate Cost: Apple loses $800 Million

Apple = iLost

RE: Fruity Karma
By nikon133 on 11/12/2012 3:08:17 PM , Rating: 2
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...

RE: Fruity Karma
By testerguy on 11/14/2012 11:07:14 AM , Rating: 2
LOL @ the delight you seem to obtain from incorrect news:

A Samsung official has reportedly denied claims that the company has raised the price it charges Apple for its iPhone and iPad processors by almost 20 percent. Speaking with Korean newspaper The Hankyoreh, the unnamed official added that prices were agreed upon at the beginning of each year and "aren't changed easily." Monday's report in rival paper Chosun claimed Apple and Samsung have a supply agreement that runs through to 2014, and unless "special cost factors" were involved, unit prices have traditionally stayed level.

So Samsung S-Failed?

Tisk Tick
By rippleyaliens on 11/12/2012 1:15:23 PM , Rating: 4
Appls-- Oranges..
Apple NEEDS Samsung for the Forseable future..Nothing APPLE can do about that.. EVEN when and IF.. Apple finds another maker.. BOOM.. 1) Problems with newbie.. AS they are ramping up to speed to handle 200+ Million Processors, PER YEAR..(Iphone+Ipad+MINI pad+Ipod, etc..)..
2) Apple will be praying that the new manufacturer will be able to meet their demands..
3).. Samsung also makes awesome displays, in which apple is still kicking itself in the arse for dumping.. QUALITY..

The Killer.. Samsung also makes TV's.. SSD's .. MEMORY... Displays for ALOT of other things.. CPU's.. (The killer..).. Im Surprised it wasnt 50%.. BUT then again, this is early.. CONTRACT is written, etc..

I CAN SEE SAMSUNG, hitting a PREMIUM of 50%-60%, on the next contract.. YES Apple will indeed findsomeone else.. BUT.. That also means, that Samsung will have free space, in which ANOTHER Vendor, will EASILY take apples place..

RE: Tisk Tick
By xti on 11/12/2012 6:31:04 PM , Rating: 2 a vendor?

By wannabemedontu on 11/12/2012 1:03:27 PM , Rating: 2
Well, Well, it looks like at the hear and soul of Apple projects is actually a Samsung, interesting.

By quyeno on 11/12/2012 7:05:08 PM , Rating: 2
This was long time coming and good on Samsung for doing this. I think the main reason for the price hike is supply and demand and the other customer is Samsung Mobile. Samsung is increasingly selling more and more phones and tablets and will probably need those chips themselves, they can only make so many chips and if sales of their devices are increasing then they will need a bigger share of those chips hence those chips have become a lot more sought after.

Yes Apple does a gazillion dollars but all this isn't much good cos Apple have not f'cking clue how to operate a fab and will need to recruit engineers and start from teh ground up. If all goes well, they may have a fab up and running and producing chips within 3-4yrs and even then the yields may be crap. Also if Apple wishes to make the current chips then they would probably have to pay royalties to Samsung as those chips were designed by samsung (based on ARM licenses?..not sure about this). I would imagine this would be same if TSMC were to make those chips. (could someone clarify?) TSMC is a very advance chip maker but even then it would take them quite a while to fine tune the line to get decents yields. But also remember TSMC makes chips for a lot of clients and have only certain capacity. Switching from chip to another isn;t so straight forward and requires recalibration, etc..for the new chip and this takes time. This is all assuming that TSMC doesn't already have its books stacked with orders, if so Apple would have to wait a very long time. To put this into perspective how important Apple is to TSMC, a while back Apple offered to invest a billion dollars or so in TSMC but TSMC refused because they prefer to make chips for a portfolio of clients and being obliged to make chips for Apple isn't in their best interest.

As we all know Samsung Displays recently dropped Apple and that was their decision and this really is a set back for Apple cos LG planels are not as good quality, in place of Apple, Samsung Dispalys will be supplying Amazon and more likely increasing supply to Samsung Mobile to meet demand. So even though it seems Samsung has 'lost' a customer, in fact they are probably in a better position as they can focus on meeting the increasing demand for their own devices. Who knows the Kindle may end up using more Samsung silicon in future.

It's great Samsung has done this, because it shows to other existing Apple suppliers that they can increase their prices and Apple will/may have to pay. No company will ever take a hit in their bottom line just to satisfy Apple regardless how much Apple buys and since Apple is a device manufacturer, they will always be at the mercy of their component suppliers.

By silverblue on 11/12/2012 8:40:40 PM , Rating: 2
"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.

I don't think there was any real need to type the second paragraph. Also, the second was in the first sentence is superfluous.

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.

go away apple
By p05esto on 11/12/2012 5:57:30 PM , Rating: 1
Please just go away and die Apple. You were cool again for a couple years but now your over-priced and closed off systems look lame (like the guy sitting in Startbucks on his laptop or someone driving a hybrid). Crap fads like that come and go, Apple has went away.... these are my dreams anyway.

By Tony Swash on 11/12/12, Rating: -1
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.

"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone

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