When two of the biggest companies in tech are hardcore frememies, it’s nearly impossible to find the middle ground to reconcile. Samsung and Apple are trying to break things off entirely, even though they need each other.
In the latest news on their breakup, Samsung has said that they will end their LCD panel supply relationship with Apple as of next year. The stated reason behind Samsung breaking ties with Apple is that Apple’s supply pricing strategy provides Samsung with insufficient margins.
The Korea Times spoke to a senior source at Samsung who explained the breakup:
“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.”
It’s been reported that Samsung was cut out of the iPad mini production. Ending their LCD supply relationship with Apple may be one way Samsung hopes to extract revenge for that slight, or it may have been a preemptive strike due to their declining relationship. Apple and Samsung have had a series of legal battles in the U.S. and abroad fighting over their Intellectual Property and whether or not Samsung ripped off the iPad.
In order to make up for their loss of revenue by cutting ties with Apple, Samsung is fielding more orders from its consumer electronics division as well as Amazon, which is using Samsung LCDs in the Kindle Fire HD which competes with the iPad.
Apple uses many Samsung components in their products, but have recently pledged to become less dependent on Samsung for components. Apple was Samsung’s top customer for LCD components for the first half of 2012, but they began cutting back on their LCD orders from Samsung back in September and purchasing more components from LG and Sharp.