October 23, 2012
Samsung Says It Is Still Supplying Screens To Apple
Michael Harper for redOrbit.com — Your Universe Online
It was a story which seemed as if it could be very true. After all, the two companies involved have been at odds with one another for over a year now, and it only makes sense that at some point the spark would one day fade away.
Yesterday, the Korea Times wrote a report, citing an “unnamed senior Samsung official” who claimed the Korean company would stop supplying LCD panels for use in Apple´s iPads, iPhones and Macs as soon as next year.
“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,” explained the unnamed senior source, speaking to the Korea Times. The same source went on to say shipments to Apple have fallen to just 1.5 million panels in the third quarter, down from 15 million in the first 2 quarters. The report also claimed Amazon would be picking up where Apple left off, placing several large orders for LCD panels.
Now, an official spokesperson for Samsung´s display division has spoken up to refute these claims, saying the report was untrue.
“We did not cut the supply for Apple,” explained the spokesperson in the statement. “Because of the patent lawsuit, the industry is guessing we tried to cut the supply. We didn´t do that. We will continue to supply panels for any customer.”
Though neither Apple nor Samsung have officially released financial information about the partnership between them, financial documents filed in Korea have shown that Apple was Samsung´s largest customer last year, buying nearly $8 billion in chips and screens for use in their products.
According to the Wall Street Journal, this made up nearly 15% of Samsung´s total revenue from component businesses. While $8 billion is no small number, it is a small percentage of Samsung´s overall take last year: $149 billion. As it turns out, selling a wide swatch of products all over the world can be good for business.
Yesterday´s report also mentioned market research and financial analysts who claimed Apple has steadily been placing smaller orders from Samsung throughout the year. However, these smaller numbers could also coincide with the iPad product cycle, which releases early in the year, around March and April. It would make sense, then, that Apple would place smaller orders towards the end of the year, especially as many are now looking to Apple to refresh this line every year at the same time.
It has also been previously reported that Samsung will not be providing smaller screens for the rumored smaller iPad, which was announced today by Apple.
An earlier report from the Korea Times also suggested that Apple has already begun to reduce their independence on Samsung for their chips and microprocessors.
When companies like iFixit.com and other enthusiasts began to tear open their new iPhone 5's like Christmas presents, they found that Apple has begun to use another chip maker for their memory chips. The new, A6 processor, on the other hand, is still built in Samsung factories, but has been completely engineered by Apple, without help from Samsung´s teams.
Mark Newman, a Samsung watcher for Bernstein Research in Hong Kong, spoke with the Wall Street Journal, saying while this split may not happen now, the two companies are on their way towards independence from one another.
“But the concern over this is overdone.”
“Since Apple is the worst possible customer to imagine in terms of requirements and willingness to pay, I believe long term they are better off without Apple,” said Newman, speaking of Samsung.
“Furthermore, longer term an Apple without Samsung´s components will be less able to compete in the marketplace, which further benefits Samsung.”