Samsung Terminates LCD Contract With Apple 377
An anonymous reader writes "Samsung has decided to terminate an ongoing contract with Apple to supply LCD panels for use in its growing range of devices. That means, come next year, there will be no Samsung panels used across the iPad, iPod, iPhone, and Mac range of devices. The reason seems to be two-fold. On the one hand, Apple has been working hard to secure supplies from other manufacturers and therefore decrease its reliance on Samsung. On the other, Apple is well-known for demanding and pushing lower pricing, meaning it just doesn't make business sense anymore for Samsung to keep supplying Apple with displays."
Patent disputes (Score:4, Insightful)
Re:Patent disputes (Score:5, Insightful)
Or perhaps Samsung was simply not willing to reduce prices as low as Apple's other screen manufacturers like LG were? Or was not willing to commit to the volumes Apple wanted? Or any other many reasons why they might end this kind of supply contract?
Re:Patent disputes (Score:5, Interesting)
I'm just guessing.
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Can I get one of those for my laptop?
Re:Patent disputes (Score:4, Funny)
They will never make something with a form factor that can be mistaken for an iPad.
Now that the form factor of a rectangle is taken, they could always make a tablet in the shape of an "L".
Re:Patent disputes (Score:5, Funny)
Wishes do come true. (Score:5, Informative)
"Google has also been working with Samsung to launch a 10-inch tablet, confirming leaks which suggested Google had teamed up with the Korean manufacturer for another device. Our source tells us that internally the tablet goes under the name “Codename Manta”, runs Google’s new Android 4.2 operating system (previously referred to as Key Lime Pie, but is set to retain the Jelly Bean branding), and will offer a 2560×1600 pixel (16:10) resolution, which we believe will offer around 300 pixels per inch (PPI) compared to the new iPad’s 264 PPI."
http://thenextweb.com/google/2012/10/21/revealed-everything-that-google-will-announce-at-its-android-event-on-october-29/ [thenextweb.com]
Re:Patent disputes (Score:4, Informative)
Or similar stupid "widescreen" format :-/
You mean unlike Apple's stupid 4:3 "widescreen" format? Yes, they officially advertise their 4:3 screen as widescreen [apple.com].
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Re:Patent disputes (Score:5, Insightful)
Or perhaps Samsung was simply not willing to reduce prices as low as Apple's other screen manufacturers like LG were? Or was not willing to commit to the volumes Apple wanted? Or any other many reasons why they might end this kind of supply contract?
Give me a break. The gun is still smoking from two of the worlds largest vendors going head to head in a monster legal battle, and we want to sit here and jerk each other off with all the other business theories as to why a contract was terminated between the two?
Seriously, let's stop bullshitting each other here with answers straight out of the MBA textbook already. After what they just went through, one does not simply kiss and make up.
We all know damn well why this happened, regardless if anyone will utter a word beyond the golf course.
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It's not that simple.
Apple has been moving away from relying on Samsung for parts, for over a year now.
At some point, one of them was going to cut the ties. The patent lawsuit that turned them from frenemies to just plain enemies was probably that point. And after the outcome, Samsung probably wanted to hurt Apple.
But Apple has been preparing that exit for quite a while now. So it's not too great a hurt.
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To break a contract with them before they had alternatives lined up would have resulted in yet another suit which Samsung may well have lost. I imagine they timed their cut from Apple very carefully to ensure there was a reasonable understanding that Apple could transition to another supplier.
That said, the current situation plays into Apple's favor. They *LOVE* being 'limited' 'exclusive' 'hard to find' 'highly sought after.' We know this because every new release of every new product starts with an art
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I think it makes it easier for future employment chances when you say you quit a place then were fired; you can spin quitting into any fluff, like I needed some time with the family or whatever; but making a firing look good is much harder.
Re:Patent disputes (Score:5, Interesting)
No, it's more likely economic issues. I work for a semiconductor company and we also stopped doing business with Apple (and some other major names) because they believe they wield such power (because of the huge quantities they order) that they constantly break contracts in order to demand lower prices. We were losing money on every part sold to Apple. Finally, the next time Apple threatened to take their business elsewhere if we didn't lower the price a few more cents per unit, our CEO told them not to let the door hit them on the way out. Since then, our profits have gone up.
Wal-Mart is the king of this type of supplier mistreatment, but they are certainly not alone.
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With what results? Have you found other customers who will buy comparable amounts (in aggregate) and pay higher prices? Or did your company's product volume simply decrease?
Re:Patent disputes (Score:5, Interesting)
When you can make a profit of $4 a part from 20 smaller customers who together buy say, 10M parts, but you lose $0.05 per part on 100M parts for Apple (or another big supplier-raping customer, there are many - just pick a big name), the choice is pretty easy.
Since dumping Apple and a few other major customers we gained hundreds of new smaller customers who could never get our inventory before because all the big players were buying it up. We went from a $2.5B gross revenue company that had a loss every quarter to a sub-$1B gross revenue company that has a profit every quarter. And now many of the big players are coming back, hat in hand, to try to get some of our inventory.
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A semiconductor guy saying that?!? No, the answer is not easy, and any option you choose may banckrupt you.
Re:Patent disputes (Score:5, Funny)
With what results? Have you found other customers who will buy comparable amounts (in aggregate) and pay higher prices? Or did your company's product volume simply decrease?
You just asked if they could make it up on volume when they clearly stated they
... were losing money on every part sold to Apple.
.
How pointy is your hair?
Re:Patent disputes (Score:5, Insightful)
Volume is a huge deal if you are loosing money on each item. If you're losing 5 for each unit you ship but only ship 1000, you lost $50. If you are losing 5 for each unit and you ship 100,000,000, you lost $5,000,000. That is pretty significant.
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No, once a fab is built and loaded, incremental wafer production will not help you much.
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Yeah but you were making it up on volume!
Re:Patent disputes (Score:5, Insightful)
1. We aren't the supplier's sole/major customer.
2. They aren't our sole/major supplier.
3. We changed suppliers every few years so there was no risk of dependency building up.
Also, it doesn't do anyone any good to bankrupt your suppliers. Some competitor could swoop in and buy them out. Their skilled people may leave the industry. They may merge with their competitor and reduce diversity of supply. And so on.
No sane manufacturer puts his suppliers in jeopardy by forcing them to sell at a loss.
Re:Patent disputes (Score:5, Insightful)
Re:Patent disputes (Score:4, Interesting)
Re:Patent disputes (Score:5, Informative)
In fact, it sounds like you may be exactly correct. Another version of the story I read earlier today had this quote:
“We are unable to supply our flat-screens to Apple with huge price discounts. Samsung has already cut our portion of shipments to Apple and next year we will stop shipping displays,” said a senior Samsung source, asking not to be named, Monday.
And then went on to say:
The report claims that Samsung shipped approximately 15 million LCD panels to Apple in the first half of 2012, with the pace falling to 3 million panels in the third quarter and expected to drop to 1.5 million in the fourth quarter as Apple has shifted to other suppliers.
Long story short, Apple probably made unreasonable demands for price while reducing requested quantities as they shifted to using LG and others, more or less forcing Samsung to terminate the contract. This comes as no real surprise, given the legal battles. Nor is the timing surprising, given that Apple just shifted their chip design (which Samsung had previously collaborated on) to be handled internally, is reportedly moving chip manufacturing from Samsung to TSMC and other companies, and is getting their Flash memory from Toshiba, Micron, and others instead of Samsung, as they used to. If there's something left in the iOS devices that Samsung has a hand in, the smart money would be on it getting moved to a different company as well.
Re:Patent disputes (Score:5, Interesting)
Re:Patent disputes (Score:5, Funny)
Oooh baby baby it's an iWorld...
what?
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You've got a rather lot of exaggeration and hyperbole there. For example, Apple never claimed to have singlehandedly created the PowerPC, but they did create it in concert with IBM and Motorola as part of the AIM alliance, and they did initiate the creation process. There was no PowerPC before Apple set the ball rolling; PowerPC was an adaptation of IBM's existing POWER architecture, specifically a single-chip version of the POWER1 processor. Apple never stabbed Exponential Technology in the back by decidin
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Business is no place for petty grudges.
understatement of the year? (Score:5, Informative)
With the ongoing legal action between Samsung and Apple it’s no surprise that the relationship has cooled.
Retina Displays? (Score:3)
Re:Retina Displays? (Score:5, Insightful)
Re:Retina Displays? (Score:5, Insightful)
So it's in fact not a bullshit marketing term, but an effective way to convey an idea that consumers wouldn't normally understand.
Re:Retina Displays? (Score:5, Insightful)
No, because it is much better to tell people what resolution they get, and what size screen, or such instead of a useless name that means absolutely nothing. The only reason to use such terms is to confuse customers and make it harder to compare your products to the competitions' (of course Apple knows that it's customers don't comparison shop, so they don't really care there)
Re:Retina Displays? (Score:5, Insightful)
Agreed.
Hardware manufacturer: We have a new 15 inch display at 2880x1800, wanna buy it?
Consumer: Well, is it a Retina Display (TM)?
Hardware manufacturer: Well no, that's a brand name owned by Apple. But our display exceeds what they call "Retina Display (TM)" with a PPI of-
Consumer: Not a Retina Display (TM), clearly inferior. If it was better, it too would be called Retina Display (TM). Not interested.
Re:Retina Displays? (Score:5, Insightful)
Cornea Display(TM) and then license it to all other display companies for next to nothing. Learn to OUT MARKET Apple.
On the other hand, if you call it Cornea Display, Apple will sue because it is too close to Retina. Then you get free marketing by lawyers.
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My Mom (tm) disagrees.
Re:Retina Displays? (Score:5, Insightful)
Telling the average person that their display is 100 ppi or 300 ppi or 600 ppi is not useful unless they happen to know enough about human vision to interpret it. The term "retina display" is a marketing term that means "you won't see pixelation", and that's actually a useful thing to know. I hate when companies use meaningless numbers (i.e. no connection to purpose) to market things. You end up with idiots pushing and buying 600dpi displays because it's "more" even though it's pointless for human vision.
If you're a techie and you want those numbers for some reason, that's fine. Apple still publishes the resolution and screen size like they always have. But marketing to the common person in a way that is useful to them is not "bullshit".
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Marketing terms that have real world meaning in lieu of a threshold number that it represents might be handy; but not when it's a trademarked term only used by one company. eg: if "retina display" could be used to mean any display over 300ppi then it might be useful, but being an Apple trademar
Just Because You Don't Get "Marketing"... (Score:2)
You've completely managed to avoid understanding any of Apple's very successful marketing. I mean, you missed the boa
Re:Retina Displays? (Score:5, Insightful)
Actually, it does mean something. It has a defined meaning, from Apple, presented at the keynote based on a formula relating distance, human visual acuity and the spacing between pixels on the display.
At the point where the pixels are indistinguishable (by varying either d or h, or a combination of both), the display is termed "Retina".
This is the actual slide presented by Apple when explaining the terminology ("a" is the viewing angle subtended by the pixel spacing "h" and distance from your eye "d").
http://www.melamorsicata.it/mela/wp-content/uploads/2012/03/formula-Retina-display.jpg [melamorsicata.it]
Just because you *think* it's bullshit doesn't mean it actually is. Your ignorance of a fact doesn't make it untrue.
if it's a scientific term, then should be open (Score:5, Insightful)
If "retina display" is used as a scientific rather than marketing term then it shouldn't be copyrightable by Apple. Any display of equivalent angular density should be freely called a "retina display".
Re:if it's a scientific term, then should be open (Score:4, Informative)
"Retina display" isn't copyrighted by Apple. In fact it's not even a trademark.
"Retina [uspto.gov]" is the trademark.
Copyright [wikipedia.org] and trademark [wikipedia.org] are not the same thing.
Re:Retina Displays? (Score:5, Informative)
Actually, it does mean something. It has a defined meaning, from Apple, presented at the keynote based on a formula relating distance, human visual acuity and the spacing between pixels on the display.
Actually, the formula has more to do with the distance between the customer's wallet and Apple's bank account.
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No, because it is much better to tell people what resolution they get, and what size screen, or such instead of a useless name that means absolutely nothing. The only reason to use such terms is to confuse customers and make it harder to compare your products to the competitions' (of course Apple knows that it's customers don't comparison shop, so they don't really care there)
IPS QSXGA? WTF does this mean to a normal person? Does this chart [wikipedia.org] really help anyone figure out if a device is useful for them? Really they have no idea, because it's not just the size of the pixels, it's how the UI handles it. Retina, while it may be a bit hyperbolic, is very very accessible to the market, and makes sense out of the alphabet or number soup that is display resolution.
Retina is a "brand", and a brand is a promise. Many folks like that kind of speak, and don't care to listen to what they
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Wait, to confuse customers who know nothing? Me thinks you are mad at the wrong party here...
Apple is doing what's right for them as a company, seeling to people.
This seems to be yet another case of geeks getting mad they aren't being first and foremost courted in the electronics arena.
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It's not like Apple doesn't also list the tech specs. They list both inch measurements, resolution, and PPI. See, e.g., http://www.apple.com/ipad/specs/ [apple.com]
Re:Retina Displays? (Score:5, Informative)
True story, my mother asked me to set her computer up to use the highest resolution because that is better. So I did. And she complained that everything got small and that every time she clicked something weird would happen (she was clicking about 3 inches to the left of the edge of the monitor, and that was a different row of icons after the resolution changed.
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This ability has been there since XP, at least (though it didn't work all that well until Vista in practice, due to third-party apps mishandling it).
Re:Retina Displays? (Score:5, Informative)
People shopping for TVs in Walmart understand resolution and pixel size, especially if they get to stand 1 foot from a 70" 1080p TV and see that it doesn't really look very good up close compared to a 720p 32" TV at the same distance.
It's not that people are stupid, they're just often lazy and *don't care* to think or understand or learn. Apple fucking LOVES people who only want to hear and use buzzwords with no understanding of what they actually mean, people who don't evaluate products beyond their marketing -- that's been their core customer base since, fuck, the iMac? Likely even earlier than that, but that POS is the earliest device they made in my memory that really went whole-hog on "OMG IT LOOKS SO COOL!" and nothing else.
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So it's in fact not a bullshit marketing term, but an effective way to convey an idea that consumers wouldn't normally understand.
"The vertebrate retina (play /rtn/ RET-nuh, pl. retinae, play /rtini/; from Latin rte, meaning "net") is a light-sensitive tissue lining the inner surface of the eye. ", right, totally that definitely makes a lot of sense being applied to a display technology. Very self explanatory.
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If only Apples marketing weren't so gosh darn effective. If their marketing sucked, they wouldn't have a stand to leg on. No one would be paying three times as much for second rate hardware that is only half as good as real computer and phone gear but noooooooo, they have to know how to market stuff. Wy don't people just ask slasgdot nerds about what they should buy so they know their stuff was really cool and not just faux cool?
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So basically it's a brand name for a component. You have to admit 'Retina Display' sounds better than 'highest PPI IPS panel'.
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Well, lucky for you, Apple has always published the iPad screen's specifications. http://www.apple.com/ipad/specs/ [apple.com]
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It's really too bad Apple doesn't specify the resolution of the iPad. Oh wait, it's in the first paragraph on their "features [apple.com]" page, along with a handy image comparing its resolution to a 1080p HDTV. It also clearly explains the purpose of a high-resolution display.
Re:Retina Displays? (Score:4, Funny)
'Retina Display' is just one of Apple's bullshit marketing terms.
Oh no way, it's totally different, you just don't get it. And soon Apple will introduce its revolutionary Eustachion Tube speakers[tm].
Re:Retina Displays? (Score:5, Funny)
... one of MANY bullshit marketing terms...
come to think of it, that applies to virtually all marketing terms.
Re:Retina Displays? (Score:4, Informative)
It was mentioned that LG and Sharp will supply the new displays.
Personally I'm surprised Apple had allowed Samsung to have so much of the component business for so long. I'm not talking about patent disputes. Instead I refer to the lessons learned from basing your desktop computer manufacturing on a single supplier's (Motorola) ability to produce the components needed.
It makes good business sense to have alternate suppliers to keep the pricing competitive.
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It's simple, Samsung was the only kids on the block with that quality and reliability.
Apple have tried a few times before, but the results have generally been rather bad [cnet.com].
I seem to recall some similar stories now and then, but right now it's so much Google noise it's hard to find old stories.
Anyway, seems like other producers have caught up, and are now ready to deliver. Hopefully.
Stabbed 'em right in the retina display? (Score:2)
This could not possibly have anything to do with Apple's recent legal activities, eh?
Hey Apple! (Score:5, Funny)
Here's a link you can use:
http://www.alibaba.com/showroom/crt-monitor-manufacturers.html [alibaba.com]
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Here's a link you can use:
http://www.alibaba.com/showroom/crt-monitor-manufacturers.html [alibaba.com]
Yaj! In the light of the new vinyl rage, I would definitely welcome CRT screens for The Next iPad. Pick-up on the back side, monitor on the front, it would be the gadget of the year.
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FUD (Score:4, Interesting)
Uhm, Apple has been rapidly reducing their orders to Samsung. Samsung admits as much in the article.
In other words, this is a (lame) face-saving PR stunt by Samsung. "WE'RE CUTTING OFF APPLE'S SUPPLY OF DISPLAY PANELS (uhm, as soon as Apple stops ordering from us)."
Re:FUD (Score:5, Insightful)
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Samsung has provided Apple with heavily discounted prices based on really large volume. Apple has actively been working to find other display providers so as to not purchase from Samsung. Samsung no longer has economic interest to provide Apple with heavily discounted displays since Apple is no longer providing the volume to which Apple negotiated. Samsung is simply telling Apple to finish finding their other suppliers as fast as possible because Samsung is no longer going to stay in an agreement to which A
Third Reason: (Score:5, Informative)
On the one hand, Apple has been working hard to secure supplies from other manufacturers and therefore decrease its reliance on Samsung. On the other, Apple is well-known for demanding and pushing lower pricing, meaning it just doesn't make business sense anymore for Samsung to keep supplying Apple with displays."
On my third hand, Apple and Samsung have been suing the piss out of one another, and that is beginning to strain other business relationships.
Re:Third Reason: (Score:4, Funny)
That's my GRIPPING hand, you insensitive clod!
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Now, trying to leverage their positions makes more sense "If you don't drop that lawsuit over patents X and Y, we're going to raise the rates on our screens." And if that doesn't work, that obviously could lead
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On my third hand, Apple and Samsung have been suing the piss out of one another, and that is beginning to strain other business relationships.
On the fourth hand, I think you're out of hands.
Tapering off... (Score:2)
It would appear they've been tapering off their shipments of displays for while. This really should not shock anyone, aside from the fact that everyone knows Samsung hates Apple, companies move to where the components are priced where they want them to be all the time. Nothing to see here, move along.
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You liked that one eh? =D
Not the whole story (Score:5, Interesting)
That Samsung "terminated" the LCD contract has zero impact as Apple wanted to eliminate them from the process anyway and seeing how steadily demand dropped (1,5 million are peanuts if you take into account how many products have LCD panels) that process was already underway. The only thing here is that Samsung can save a little face.
So is this pure PR or even damage control. And it is understandable, if a big client like Apple announced it takes it business elsewhere as a company you gonna take a hit.
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Actually, logic does not really get in the way of rage against Apple. Well, most of the time, it does not.
Re:Not the whole story (Score:5, Interesting)
Naturally, has nothing to do with Samsung tablets (Score:2)
None of this has anything to do with patent disputes, Samsung tablets, Samsung smartphones, or anything else.
Because gullible American media people believe any lie they're fed by their Corporate Overlords.
And the real losers are the apple customers... (Score:5, Interesting)
Samsung displays were actually the only non-defective displays that shipped with the new retina macbooks. Other screens have had huge ghosting issues (I went through 4 laptops before getting a Sammy screen that actual worked right) pretty much fresh off the lot.
It would be nice if this brought these ridiculous issues out into the light so Apple has to face the fact they completely screwed up the retina launch... of course, we all know that would never happen.
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Samsung displays were actually the only non-defective displays that shipped with the new retina macbooks. Other screens have had huge ghosting issues (I went through 4 laptops before getting a Sammy screen that actual worked right) pretty much fresh off the lot.
It would be nice if this brought these ridiculous issues out into the light so Apple has to face the fact they completely screwed up the retina launch... of course, we all know that would never happen.
And yet you keep buying their garbage.
Its the maps... (Score:5, Funny)
Isn't the 3rd reason obvious? (Score:2)
Reason 3: Samsung didn't appreciate being sued by apple?
Self reinforcing cycle (Score:5, Interesting)
2: Apple decides to reduce orders from Samsung and order from competitors.
3: Apple demands lower prices for components.
4: Samsung decides to reduce the supply available to Apple.
It sounds like all of those have been gradually happening to a greater and greater degree over time. I don't know which particular item happened first, but once the cycle started it just kept on escalating. The smaller the size of the order by Apple (either in terms of number of components or price per component) the less valuable the contract becomes, and the more Samsung is going to focus on finding alternatives to sell to. The smaller the number of units Samsung makes available to Apple and the less they're willing to budge on price, the more Apple is going to focus on finding alternatives to buy from. The less dependent each of them get on each other, the more the gloves come off in the courtroom. The more lawsuits that get filled, the less comfortable both of them are going to feel about depending on the other to sell/buy components to/from.
Or.. (Score:2)
1: Apple and Samsung get involved in lawsuits.
2: Apple decides to reduce orders from Samsung and order from competitors.
3: Apple demands lower prices for components.
4: Samsung decides to reduce the supply available to Apple.
It sounds like all of those have been gradually happening to a greater and greater degree over time. I don't know which particular item happened first, but once the cycle started it just kept on escalating. The smaller the size of the order by Apple (either in terms of number of components or price per component) the less valuable the contract becomes, and the more Samsung is going to focus on finding alternatives to sell to. The smaller the number of units Samsung makes available to Apple and the less they're willing to budge on price, the more Apple is going to focus on finding alternatives to buy from. The less dependent each of them get on each other, the more the gloves come off in the courtroom. The more lawsuits that get filled, the less comfortable both of them are going to feel about depending on the other to sell/buy components to/from.
Or, Samsung realized that it could use its manufacturing capacity in making screens for Apple to make screens for its own product and those have a much higher profit margin than they got from Apple.
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Yeah. (Score:3)
And the fact that Apple and Samsung have been at each others' throats in court for years has nothing to do with it.
To be honest, I'm surprised they still did any business with each other. Generally when one company gets the other's product banned from sale, it tends to put a strain on the relationship. But in the mobile market where everybody is suing everybody else, it's probably hard to keep track.
Early termination penalty? (Score:2)
Most contracts have a penalty for early termination, any news on one?
That's what happens.... (Score:2)
That's what happens when you bite the hand that feeds you. Of course Apple will somehow spin this as a positive.
Is Samsung run by Russian Orthodox Christians? (Score:4, Interesting)
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Apple pushes its suppliers to provide at lower cost. It's our job to push apple to lower its prices, if we want their products....
Re:On the "third hand"... (Score:5, Informative)
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Not if they are building a competing product with your parts.
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That refers to the prices of its suppliers, not to the prices of its products.
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On the other, Apple is well-known for demanding and pushing lower pricing
Since when???
The price they, Apple, pays.
The real question is, if it's so "well-known" that Apple pays less and less for parts with each generation, why aren't Apple customers pushing Apple for lower prices on their finished goods?
I assume it has something to do with that old "sucker born every minute" adage...
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No one is ever really supply constrained for long periods of time. On anything that isn't on the periodic table and on earth anyway. You can artificially constrain supply, for marketing purposes or because of voluntary stupidity.
Samsung must figure they can sell the parts to themselves or someone else for more money, a couple of days ago I figured (in a comment on /.) that they were trying to keep their parts and products businesses separate to not lose Apple as a cash cow, but they obviously had other id
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Don't be silly. The only thing the iPhone had that competing phones didn't was a good web browser.
The iPhone was missing just about every other essential smartphone feature, and many basic features common to even the cheapest dumphones!
Let's not play-pretend that the launch phone even remotely resembled later models. It was a complete joke. You couldn't install apps, you could copy and paste, it couldn't handle MMS messages, you couldn't multitask, etc. It was absolutely awful.
It took Apple 4 years of f
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