Samsung: We Won’t Raise Chip Prices On Apple Before Next Year

Samsung: We Won’t Raise Chip Prices On Apple Before Next Year

As Apple and Samsung try to purge themselves of dependency on one another things are bound to get even more ugly over the next 12-18months. A report came out earlier this week that Samsung was planning to raise the price on Apple’s processors by 20%.

The significant price increase would mean Apple’s cash cow – the iPhone – wouldn’t have as profitable margins which would negatively effect Apple’s bottom line. However, an official at Samsung has come out today to deny the changes and says that a 20% price hike isn’t coming.

The official said that prices are set at the beginning of the year and aren’t changed easily, so a sudden 20% spike at the beginning of 2013 isn’t really plausible. If Samsung did choose to increase prices Apple could choose to shift production to another vendor, but such a move might be 1-2 years away.

If Samsung were to raise prices by 20%, analyst Gene Munster claims Apple’s gross margins would take a 1% to 2% hit, but Apple would probably just move to another supplier. Apple is still one of Samsung’s biggest customers, so losing Apple’s business would also negatively effect them as well.

  • Josh_J_Ward

    Remove the word ‘Not’ from the title to make it correct for this post.

About the author

Buster HeinBuster Hein is Cult of Mac's Senior News Editor and lives in Phoenix, Arizona. Twitter: @bst3r.

(sorry, you need Javascript to see this e-mail address)| Read more posts by .

Posted in News | Tagged: , , |