You mess with the bull, you’re going to get the horns. Google discovered this when they launched Android, their own competitor to iOS, a move which ultimately resulted in Apple jettisoning the search giant’s products almost entirely from iOS 6. Now Samsung is finding out the same thing: not only has it been found guilty of infringing Apple’s intellectual property and been told to pony up a $1 billion fine, but now Apple is now taking away their portion of Samsung’s multi-billion dollar manufacturing business.
Samsung’s long been one of Apple’s most industrious manufacturing partners, having supplied previous iOS devices with many of their components from their systems-on-chip to other components, like the display. Samsung’s made a lot of money manufacturing these components for Apple, which was what made it always a risk that Apple would pull away their manufacturing business from Samsung as soon as they could in response to the IP infringement of the Galaxy series of smartphones and tablets. After all, why continue to build your products in a competitor’s factories when all that results in is giving them an early look at your products?
According to The Korean Times, this split is now definitely happening. According to a senior Samsung official, there used to be a dichotomy in the Apple-Samsung relationship: Apple and Samsung were bitter adversaries when it came to releasing smartphones and tablets, but happy partners in the manufacturing realm. Now Apple has indicated that Samsung’s manufacturing arm will no longer have their business.
The Samsung official said that “Samsung’s agreement with Apple is limited to manufacturing the A6 processors. Apple did all the design and we are just producing the chips on a foundry basis.”
In addition, Apple’s made the iPhone 5 almost entirely without help from Samsung. For example, previous iPhones had displays supplied by Samsung; this time around, Sharp, LG and Japan Display are the ones supplying the screens.
Samsung is, of course, doing well with its Galaxy series of smartphones, especially the Galaxy SIII, which managed to briefly outsell the iPhone 4S back in August. But is it worth it? Apple’s taking billions away from Samsung at this point between legal fines and manufacturing deals. Long term, of course, becoming an Apple-sized presence in the smartphone and tablet market is worth far more to Samsung than keeping its relationship with Apple intact, but can Samsung ever get there?
Source: Korean Times