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Displays The Courts Apple Technology

Why Apple and Samsung Still Get Along, Behind the Courtroom Battles 125

Posted by timothy
from the commerce-keeps-people-friendly dept.
After suing each other for the last few years in various courts around the world, you'd think that if Apple and Samsung were human beings they would have walked away from their rocky relationship a while back. The Wall Street Journal explains (beside the larger fact that they're both huge companies with complex links, rather than a squabbling couple) why it's so hard for Apple to take up with another supplier. Things are starting to look different, though: "Apple's deal this month to start buying chips from TSMC is a milestone. Apple long wanted to build its own processors, and it bought a chip company in 2008 to begin designing the chips itself. But it continued to rely on Samsung to make them. ... TSMC plans to start mass-producing the chips early next year using advanced '20-nanometer' technology, which makes the chips potentially smaller and more energy-efficient."
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Why Apple and Samsung Still Get Along, Behind the Courtroom Battles

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  • by kthreadd (1558445) on Sunday June 30, 2013 @05:59PM (#44149217)

    Now they are just riding it out, both laughing all the way to the bank.

    • by Anonymous Coward on Sunday June 30, 2013 @06:10PM (#44149245)

      Alliance: two thieves who have their hands so deeply insert into each other's pockets that they cannot separately plunder a third.

      • by Anonymous Coward

        Alliance: two thieves who have their hands so deeply insert into each other's pockets that they cannot separately plunder a third.

        That sounds like something out of Ambrose Bierce's Devil's Dictionary.

        • by arbiter1 (1204146) on Sunday June 30, 2013 @06:36PM (#44149329)
          Um, not really, Apple needs Samsung, Samsung doesn't need apple. Samsung is one few companies that can keep the demand apple has for chips in its phones. Going from company size, Samsung is much larger and worth a lot more considering they make so many products where as Apple 95-98% of their profits are from 2 product's
          • by devleopard (317515) on Sunday June 30, 2013 @08:13PM (#44149839) Homepage

            Samsung's stock took a 6% hit, or $10B in market cap lost, when it was RUMORED they were losing Apple chip contract last year:

            http://www.reuters.com/article/2012/05/16/us-samsung-chips-idUSBRE84F0BT20120516 [reuters.com]

            Perhaps Samsung doesn't *need* Apple, but they are a major customer and a major source of revenue. Kinda like saying WalMart doesn't *need* to have stores in Texas or California.

            • by Jah-Wren Ryel (80510) on Sunday June 30, 2013 @09:38PM (#44150273)

              Samsung's stock took a 6% hit, or $10B in market cap lost, when it was RUMORED they were losing Apple chip contract last year:

              Are you seriously trying to imply that the stock market in the short term is an objective measure of, well, anything other than the emotions of the participants?

              • Samsung's stock took a 6% hit, or $10B in market cap lost, when it was RUMORED they were losing Apple chip contract last year:

                Are you seriously trying to imply that the stock market in the short term is an objective measure of, well, anything other than the emotions of the participants?

                Yes.

              • Samsung's stock took a 6% hit, or $10B in market cap lost, when it was RUMORED they were losing Apple chip contract last year:

                Are you seriously trying to imply that the stock market in the short term is an objective measure of, well, anything other than the emotions of the participants?

                Everybody knows it's only valid for AAPL.

            • If Apple disappeared and 1 Infinite Loop became an instant smoking crater, the market demand for cell phones with Samsung chips and displays would not disappear. So some other company would make those cell phones with Samsung chips and displays in them. Perhaps an enlarged division of Samsung. Perhaps some other customer of Samsung.

              The fact that a bunch of speculators leapt at a rumor like that is more a reflection of how flaky investors are, not a reflect on anything about Samsung.

          • by Savage-Rabbit (308260) on Sunday June 30, 2013 @08:19PM (#44149869)

            Um, not really, Apple needs Samsung, Samsung doesn't need apple. Samsung is one few companies that can keep the demand apple has for chips in its phones. Going from company size, Samsung is much larger and worth a lot more considering they make so many products where as Apple 95-98% of their profits are from 2 product's

            Samsung's electronics division is a mini corporation within the Samsung empire that cares more about what Apple is doing than what most of the rest of the Samsung empire is doing. At the moment Samsung is making a bundle off of every iPhone, iPad and iPod sold by Apple on top of what they are making from their own like of tablets and smartphones and that has to count as a pretty nice win-win situation. I can't imagine that the bean counters at Samsung are happy at the prospect of a major smartphone and tablet computer manufacturer who commands 20% of the smartphone market and 40% of the tablet computer market (and the lucrative high end segments of those markets at that), will in future be spending money that previously flowed into Samsung 's coffers with Samsung's competitors.

          • by maccodemonkey (1438585) on Sunday June 30, 2013 @09:41PM (#44150283)

            Um, not really, Apple needs Samsung, Samsung doesn't need apple. Samsung is one few companies that can keep the demand apple has for chips in its phones. Going from company size, Samsung is much larger and worth a lot more considering they make so many products where as Apple 95-98% of their profits are from 2 product's

            TSMC plans to start mass-producing the chips early next year using advanced '20-nanometer' technology, which makes the chips potentially smaller and more energy-efficient.

            Seems Apple doesn't need Samsung.

            • by AmiMoJo (196126) *

              Assuming TSMC can really start churning high millions of chips on a brand new 20nm process reliably. Seems unlikely considering how often they have had teething problems with new processes in the past.

              You don't just buy a machine that turns raw silicone into CPUs or radios. It is of course far too early to predict what will happen but there is a huge amount of risk involved for Apple. It really wouldn't surprise me if new hardware gets delayed or fitted with parts built on an older process as TSMC struggle

              • Assuming TSMC can really start churning high millions of chips on a brand new 20nm process reliably. Seems unlikely considering how often they have had teething problems with new processes in the past.

                According to the article, they've been doing trial runs for a few years. It's not unthinkable that they've worked out the teething issues during that time.

              • by hazydave (96747)

                Also, it's reportedly just new chips going to TSMC. That makes some sense -- there's work and money to get an existing design moved to a new process. So Samsung's still going to be making A5s or A6s for the near future. And maybe other stuff -- there's certainly a contract between Apple and Samsung that has to be run out. And it's pretty unlikely Apple would bet on a new process. They haven't so far.. the chips Samsung did for them usually started out in a more conservative process. Whether that's Apple bei

            • No; Apple are planning to not need Samsung in the future. They are doing that precisely because they do need Samsung now. They're getting rid of a single point of failure.

              • No; Apple are planning to not need Samsung in the future. They are doing that precisely because they do need Samsung now. They're getting rid of a single point of failure.

                By that reasoning, Samsung does needs Apple - else they would just stop doing business with them.

                • No; by that reasoning, if Samsung needed Apple, you'd be seeing Samsung frantically wooing customers so they're not dependant on one company.

                  • No; by that reasoning, if Samsung needed Apple, you'd be seeing Samsung frantically wooing customers so they're not dependant on one company.

                    And by the same reasoning Apple wouldn't change to a different supplier.

          • by JonnyO (119156) on Monday July 01, 2013 @12:23AM (#44150935) Homepage

            Arrangements like Apple's and Samsung's may sound strange at first but it happens a lot more than one might think. I work for a very large French company that has its own in-house IT services group, yet my subsidiary handles the majority of its IT operations on its own, including using external hosting companies and service providers that directly compete with them. We can get away with it because we execute faster, with better flexibility, higher quality, and for less money.

            BTW, controlling the manufacturing isn't the advantage some make it out to be. It's a very low-margin industry, which is why so much of it is done in low-wage places like China. If bringing manufacturing in-house had strategic value then you can be assured that Apple and any other company with a decent mountain of cash would work on acquiring such capabilities. Take a look at Sony- nobody is citing their in-house manufacturing as a key differentiator or advantage.

            • by tlhIngan (30335)

              Arrangements like Apple's and Samsung's may sound strange at first but it happens a lot more than one might think. I work for a very large French company that has its own in-house IT services group, yet my subsidiary handles the majority of its IT operations on its own, including using external hosting companies and service providers that directly compete with them. We can get away with it because we execute faster, with better flexibility, higher quality, and for less money.

              Actually, what's interesting is

            • by gl4ss (559668)

              manufacturing? this is about manufacturing of parts that you pretty much can't buy from anyone else, and the next years models of the parts you can't either...

              as for apple, it's just not in their textbook and they're doing fine as it is. they would have to magic recruit half of samsungs key people and kicking up chip production lines is a process that takes billions and years to do and even then it's risky if they can match the quality of process to actually compete. it's a nasty cutthroat business which ca

          • While "need" might be subjective, I cannot, for the life of me, figure out how the internet continues to believe that Samsung doesn't care about Apple as a customer.

            Even accounting for the fact that these articles are a bit dated (and I do mean a bit - one is months old and the other is less than a year old), it's clear that Apple is a SIGNIFICANT part of Samsung's finances.

            http://www.idownloadblog.com/2012/08/07/apple-now-accounts-for-8-8-of-samsungs-revenue/ [idownloadblog.com]

            http://www.theinquirer.net/inquirer/news/2269565 [theinquirer.net]

        • by Guy Harris (3803) <guy@alum.mit.edu> on Sunday June 30, 2013 @07:19PM (#44149487)

          Alliance: two thieves who have their hands so deeply insert into each other's pockets that they cannot separately plunder a third.

          That sounds like something out of Ambrose Bierce's Devil's Dictionary.

          That's because it is. [gutenberg.org]

    • by tuppe666 (904118) on Sunday June 30, 2013 @06:17PM (#44149271)

      Now they are just riding it out, both laughing all the way to the bank.

      Wow. Ironically Apple could have manufactured themselves under Steve Jobs regime but instead chose through cost saving go elsewhere(Samsung). They famously laughed at the president at the suggestion of bringing Apple Manufacturing to the states, and now are having the unpleasant sunrise of of their top (and only) phone looking mid range and 12-18 months out of date at launch. While Samsung refresh a product range every three months. Now thousands of patents are on various hardware components by various Korean and Chinese companies....with Apple having relatively few design & interface patents, admittedly with a friendly court system looking favourably at them.

      Thankfully Jobs does not have to live with the consequences of this...as he died, but in context of going to the bank article...Apple is going to the bank with less profits (less market share, less market cap, less brand value, less cutting edge, less interesting products, less news, less innovation). At least Dell finally got to say I told you so.

      • by dfghjk (711126)

        Usually when you find an Apple-related comment this ignorant its from a pro-Apple perspective.

        "Thankfully Jobs does not have to live with the consequences of this...as he died..."

        You're not only a fool but an asshole.

      • by rtb61 (674572)

        It was always about Apple saturation marketing. Even this article falls for the trap, Apple designed chip, what bloody Apple designed chip. Three other companies chips, stuck on a daughter board and called a chip does not make it a chip beyond Apple marketing.

      • by Anonymous Coward on Sunday June 30, 2013 @07:25PM (#44149525)
        Here's a decent blog post that I concur with as a multi-platform developer. Time to tuck away that phanboy attitude and open your eyes to the world of tech, it improves your health (always happy to hear of any new tech!) and smells a lot less like shit too! http://www.passion4teq.com/articles/ios-android-development-comparison-1/ [passion4teq.com]
      • by Guy Harris (3803)

        Wow. Ironically Apple could have manufactured themselves under Steve Jobs regime but instead chose through cost saving go elsewhere(Samsung).

        Manufactured what? Chips? Apple never did that, and I'm not sure it would have made sense for them to own Their Very Own Foundry. LCD panels? See previous comment. Systems? Samsung doesn't do that for Apple, an assortment of companies, most but not all Chinese/Taiwanese, do so [apple.com] (although that page claims some company named "Apple" also assembles Macs in Cork, so they're probably Irish :-)).

        Now thousands of patents are on various hardware components by various Korean and Chinese companies....with Apple having relatively few design & interface patents,

        Just out of curiosity, has anybody trawled through various patent databases to get numbers on that? Apple has a n

    • Even with Steve.
      The competition is across Business Units, Not the actually Businesses.

      Companies like Microsoft, Samsung, Sony, Apple... Have a lot of different Units making a slue of different stuff. Chances are these big technology companies will make something the other guy is making, Thus they will be competing to get dominance for that product. However these guys also have a fair amount of stuff that is unique to them. Where the other Companies Business unit is the Valued Customer for that piece.

  • by Cassini2 (956052) on Sunday June 30, 2013 @06:19PM (#44149277)

    A simple sure-fire plan:
    1. Outsource all of your core competencies - parts, production, everything. Keep nothing in house.
    2. Profit!!!
    Quietly, suppliers start selling direct to customers to make more money.
    3. Find cheaper suppliers - more Profits!!!
    Discover your original suppliers now sell a better product.
    4. Liquidation sale! More Profits!!!

    Last Step:
    1. Write a business school textbook, preaching the virtues of the first 3 steps.

    • by csumpi (2258986)
      ROFL. Wish I had mod points for you.
    • by Guy Harris (3803)

      A simple sure-fire plan: 1. Outsource all of your core competencies - parts, production, everything. Keep nothing in house.

      So to what company are you referring here? Apple never fabbed their own chips; they have designed their own support chips (although, these days, the Mac probably mainly use Intel and/or Nvidia support chips); they do much of the design (and, no, I don't mean just "styling") work on their machines; and they do a lot of the software engineering. I don't know whether assembly was ever a core competency, but a lot of the other stuff Apple doesn't do is stuff they never did, and the design and engineering work

    • Quietly, suppliers start selling direct to customers to make more money.

      Samsung was making and selling phones long before Apple employed them to make iPhones.

      • I have a Samsung flip phone I bought in 2004 or '05 (this one [deviceatlas.com]). Let a friend borrow it for a couple of weeks after he his was destroyed* while visiting here last month. Still has good reception and voice quality, and lasts about 3 days between charges.

        (*And therein lies a tale. I'll include it in my memoirs.)

        He also got hooked on the (Java) photo fishing game, and tried to buy the phone from me so he could keep playing it.

        One very nice advantage to the form factor (if you're male, or not, but wear guys' jea

  • TSMC is a foundry; Apple contracts with TSMC to manufacturer their chips for them.

    • Same thing. Apple give TSMC money. TSMC do wafer starts for Apple.

    • by gl4ss (559668)

      TSMC is a foundry; Apple contracts with TSMC to manufacturer their chips for them.

      actually the definition depends on who carriers the risk.. if it's apples risk then sure.. but I seriously doubt they made a deal with tsmc that is not directly tied to output of working chips.

      • by slew (2918)

        In common usage TSMC is the foundry not Apple (even if apple started buying equipment to process wafers, then it would simply be running a captive fab).

        FWIW, the common terms of large foundry contracts have varied greatly over the last few decades. Some examples of "pure" pricing models:

        * wafer starts (to reserve some fraction of capacity)
        * processed wafers (that had their wafer process monitor circuits working within a range of pre-agreed parameters).
        * working die (pre-diced chips that pass a short custom

  • Technology Reporting (Score:2, Interesting)

    by Anonymous Coward

    "Potentially" makes them smaller and more power efficient. Or rather "does" but the reporter isn't knowledgeable enough to know one way or another. And the real reason for the switch? TSMC will be shipping 20nm, and Samsung wont be for months and months and months, they haven't even announced a switch to a smaller process.

    Apple tends towards sticking the highest quality components it can find in its devices, and next year TSMC will provide that while Samsung won't be. Not hard to figure out why the switch i

    • by TechyImmigrant (175943) on Sunday June 30, 2013 @09:33PM (#44150243) Journal

      >"Potentially" makes them smaller and more power efficient. Or rather "does" but the reporter isn't knowledgeable enough to know one way or another.

      No. The reporter is spot on. While in the past doing a simple shrink without redesign or significant relayout would always give power and area savings, the same is no longer true, since energy density and leakage may go up faster than dynamic power goes down. So you may need to re-layout to dilute the heat concentrations and you may find yourself consuming more power.

      These days, adding advanced power features to chips is a necessary step to yield the full power and area benefits of denser transistors. Witness the power and area improvements in Haswell over Ivy Bridge, while the process (22nm) stayed fairly constant.

  • by alen (225700) on Sunday June 30, 2013 @08:21PM (#44149893)

    Apple can't just order 100 million cpu's from someone. You need the infrastructure and supply chain to be able to meet the orders. And you don't dare drop existing customers

    It's taking apple five years to diversify its suppliers which is about average for a company their size

    Apple's capital expenses have been huge lately which most likely means they are buying the machinery for their suppliers to make their stuff for them

    • Of course they thought they could make Mapping software over night. They only did that because they didn't want Google's name to feature more prominently within their phone.

      Sometimes even big companies make stupid decisions based more on ideology VS common sense.

      All it takes is a CEO that wants to make a name for themselves or some think tank to dream up some sort of strategic advantage.

      I think it is very much like MAD when they get really entangled, but if one starts to achieve a superior mine shaft numbe

  • Perceptions (Score:4, Interesting)

    by DaMattster (977781) on Sunday June 30, 2013 @09:49PM (#44150317)
    Sometimes the perception of conflict really works well because it draws media attention to those involved: almost like some free advertising. For the longest time, Coca Cola and Pepsi played up on the public's perception of bitter competition and conflict. In reality, the competition is a good bit friendlier with the executives at each company respecting their counterparts; If you recall, a few years ago someone tried to steal a recipe from Coke and hand it to Pepsi. Pepsi Co ended up reporting this to authorities.
    • by tlhIngan (30335)

      Sometimes the perception of conflict really works well because it draws media attention to those involved: almost like some free advertising. For the longest time, Coca Cola and Pepsi played up on the public's perception of bitter competition and conflict. In reality, the competition is a good bit friendlier with the executives at each company respecting their counterparts; If you recall, a few years ago someone tried to steal a recipe from Coke and hand it to Pepsi. Pepsi Co ended up reporting this to auth

  • by AnuradhaRatnaweera (757812) on Sunday June 30, 2013 @10:15PM (#44150421) Homepage
    "It's nothing personal, Jack. It's just good business."
  • by JDG1980 (2438906) on Sunday June 30, 2013 @10:32PM (#44150485)

    "TSMC plans to start mass-producing the chips early next year using advanced '20-nanometer' technology, which makes the chips potentially smaller and more energy-efficient."

    I'll believe this when I see it. TSMC has a chronic problem with moving to smaller process nodes; they've got a long history of over-promising and under-delivering. Oh, they eventually get it right, but early customers are basically paying for the privilege of being their beta testers, and Apple is going to find this out if they try to move away from Samsung too quickly. NVIDIA's infamous "bumpgate" fiasco was due, at least in part, to problems with an immature TSMC manufacturing process.

    • Oh, they eventually get it right, but early customers are basically paying for the privilege of being their beta testers, and Apple's customers are going to find this out [...]

      FTFY.

      But it's okay. I'm sure Tim will write a really nice apology.

  • Apple sues Samsung for damage, Samsung pays perhaps a billion.

    I could assume the money Samsung pays to the other one is covered as expenses for Samsung. So it reduces earnings.

    OTOH I would assume the money Apple receives as "damage" compensation is not counted as taxable income.

    Did Samsung not in return sue Apple for damage on another silly patent?

    So both pay each other a billion, reducing their "income" and receive a billion in damage back, which is not counted as income. The costs are court and lawyer cos

  • We'd screw up scraps of paper and throw them at each other. Here is their 'rich corporate' version: pay expensive lawyers to write
    lots of 'legal magick' words on lots of expensive paper, then pay expensive lawyers to throw said paper on behalf of the corporation.
    Essentially it's a mischievous children's activity for those with money to burn. Both corporations can easily pay their 'big' losses, and neither
    has anything useful to do with the winnings except pay more lawyers to throw more 'paper sno

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