Copycat Lawsuit Could Cost Samsung Billions As Apple Moves To Freeze Them Out Of iPad 3 and iPhone 6 Production

Copycat Lawsuit Could Cost Samsung Billions As Apple Moves To Freeze Them Out Of iPad 3 and iPhone 6 Production

Apple says Samsung's phones and tablets, like the Galaxy S above, rip off its designs.

Starting in 2012, if you want to see Samsung and Apple together, your best bet is in a courtroom. The two rivals’ “frenemy” status apparently has reached the breaking point, with a “deafening” roar of leaks indicating the Cupertino, Calif. tech giant will dumping Samsung built A5 and A6 processors as part of a larger purge that could completely eliminate the Korean manufacturer from Apple’s entire supply chain.

Apple is expected to introduce the A6 chip in 2012, according to unnamed “semiconductor industry” sources cited by Ars Technica Monday. “It seems likely that Apple is making the change to cut some, if not all, Samsung-made components out of its supply chain,” the report said.

Taiwan Semiconductor Manufacturing Company (TSMC) is Samsung’s likely successor. Although Apple reportedly will pay Samsung $7.8 billion for components this year, making the iPhone and iPad maker the Korean firm’s largest customer, the legal back-and-forth between Apple and Samsung have fatally damaged the business relationship. Apple accuses Samsung of ripping-off the iPhone and and iPad’s sleek appearance while Samsung charges the tech giant with patent infringement.

If this report is true, copying the iPhone might be one of the costliest mistakes Samsung has ever made. It’s just a standard rule of business: you don’t try to compete in the same market with your own biggest client. How dumb can you get?

[via Apple Insider]

  • macgizmo

    The only problem with your closing statement, Ed, is that Samsung was making the products before Apple was.

  • arti.fact

    It’s not dumb, it’s business.

  • Chris Brunner

    Ouch! Samsung will be hurting from Apple’s withdraw in using their parts in the iPhone. That’s what they get for messing with the bull… The horns!!!

    -Chris
    http://friendsofmac.net

  • Johnson Philip

    They were making ‘mobile phones’ not multi-touch based ‘smart phones’! Whether you like it or not, the iPhone revolutionised the way people use their phones … Listen, you Android troll … Samsung have blatantly copied the market leader’s interface … at least HTC put some effort with their sense UI! This are just business tactics to make Samsung see the light and force them into a licensing deal with Apple … If this did go to trial instead of an out-of-court settlement, I can only see one winner … and that is Apple!

  • Tallest_Skil

    The only problem with your statement is that it’s wrong.

  • lwdesign1

    I’m pleased to see Apple finally standing up for its rights. It frosts my cookies to see all of these new “smartphones” and “tablets” have come along from other manufacturers that mimic the iPhone and iPad. Once Apple figured out how to make it work, everyone else started copying. Same happened with the graphic user interface. Before Apple came along, computers were command line based. Yes, I know the story of how Steve Jobs saw the GUI research that was going on at PARC and was inspired by it, but PARC never did come to market with an actual GUI that I know of. Apple has been a consistent innovator and sets the standard.

    Apple redesigned laptops by moving the keyboard towards the screen and placing first a trackball, then a trackpad–now every laptop is designed like this from every company (well, except for Lenovo’s pointy red button thingy). 

  • koopapoopas

    They were making Nokia and RIM clones – kind of like how Android was going to be a RIM clone until the iPhone was released.  

    And while we are at it.  Apple’s always been ripped off, and it’s trying to not make it so easy these days.  Eg:  The Apple Newton came out in 1993 – even before Microsoft could hack Win95 together.  Way before tablet PCs, Palm Pilots, and Wince devices.

  • gareth edwards

    “It’s just a standard rule of business: you don’t try to compete in the same market with your own biggest client. How dumb can you get?”
    I think this is a bit simplistic. It’s not really about competing with your biggest customer – I don’t think Apple would care if Samsung was making phones and pads that were a competitor to Apple’s own iPhone and iPad ranges – the real issue is that Apple have spent time nurturing and developing the aesthetic aspect of technology and as such their designs stand out from the crowd – Samsung borrowed WAY too heavily and it shows. This is what has pissed off Apple. It’s just too similar to be ignored. It’s a pity that Samsung can’t see why this would not get up Apple’s nose, grow a pair and keep Apple as a valued customer, they both benefit and their futures could be very rosy. Samsung getting defensive, posturing and time wasting has killed this dead. And not so much the winner but the loser will be Samsung. If they lose this (and they very well might) it’s gonna be a frickin hammer blow on the bottom line and then all the other associated shit that goes along with it.  Not good.

  • techgeek01

    Samsung makes tablets and phones, right? So, if the rumors are correct and Apple doesn’t do another contract with Samsung, couldn’t Samsung use the components that they sold to Apple for themselves?  Last I checked, the iPad was putting a huge strain on non-iPad tablets because the iPad was gobbling up all the components.  So if Samsung is not selling the components to Apple, couldn’t they use those components to really beef up their tablet production?

  • techgeek01

    I can’t see how Apple would be the winner in the courtroom, when it was judge who told Samsung and Apple to solve this out of the courtroom.   :/

  • Dilbert A

    nice!

  • Dilbert A

    that’s what this article is about. the solution.

  • Dilbert A

    don’t see why not.

  • Dilbert A

    dumb business practices.

  • idris83

    Uhhhh… lol? http://ow.ly/5rhcF

  • Brian

    Things like the A5 chip can’t just be taken and used by other companies. Apple owns the design and simply buys the components. Sure I mean they technically could take and do that, but it’s just another lawsuit that they won’t win.

  • Wayne_Luke

    I’ve been wondering when Apple would move to new suppliers. This is going to be a big blow to Samsung because supplying parts to Apple is a large part of their profit generation. Losing $7.8 Billion in annual revenue is really going to sting.

  • koopapoopas

    You are wrong.

    Sorry, but that image is BS.  TheF700 was announced in Feb 2007 – a month after the iPhone, and was shown at CEBIT 2007:  
    http://androidcommunity.com/wh

    Samsung has some good photocopiers. 

    BTW.  The Apple Newton came out in 1993.

  • Christian Schildwaechter

    Steve Jobs was inspired by the Alto GUI (and OO programming and networking capabilities), but also gave Xerox 100 million USD in Apple stock for the right to use something similar for the Macintosh.

    And Apple made that deal before bringing the Mac to market, Xerox didn’t have to sue them first. If Xerox had held onto that stock, today it would probably be worth more than Xerox itself.

  • ConceptVBS

    Samsung’s revenue yearly is $140 billion.

  • ConceptVBS

    The ARM core is a licensed property of ARM holdings.

    No one wants an iOS optimized chip anyway.

  • ConceptVBS

    Perhaps they are forgeting that they get supplies for NAND, RAM, displays AND batteries from Samsung.

  • Wayne_Luke

    And yet most of their actual profit comes from component sales. Not selling things like refridgerators which are low profit items. Samsung is built like the Japanese conglomerates they emulate. Yes, I know Samsung is in South Korea. They have thousands of products. Most aren’t profitable.

    http://www.electronista.com/ar

  • Charioteer

    IIRC, Apple lost the Patent case with Samsung and is now forced to pay a license for those patents along with a cash settlement. So we can complain about Samsung copying Apple as much as we like but so far it is Apple that has been found guilty of copying the works of others. 

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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