Did Tim Cook just get played? Samsung’s stake in Sharp a threat to Apple

“The recent investment in Sharp by Samsung can pose a serious threat to Apple in the long run,” Ashit Gulati writes for The Motley Fool. “Apple is considering to trim down its dependence on Samsung for supplies, as Samsung is also one its prime competitors. However, Samsung’s investment (3% stake) in Sharp that also supplies display panels to Apple, will force Apple to re-think the entire supply chain strategy.”

“Samsung’s stake in Sharp will enable it a stable access to display panels. Apple being the largest player in the industry controls a tight ship over its suppliers, however having to struggle with Samsung over production capacity and volume will relinquish its hold,” Gulati writes. “As the smart phone industry grows and diversifies with new entrants, existing players will strive hard to diversify the supply chain to sustain competitive advantage. Samsung’s growing smart phone business and the recently announced backward integration will force Apple to re-strategize, in order to avoid losing further control over its vendors.”

Gulati writes, ” A 3% stake is not very threatening; however it now pushes Apple to think out of the box to establish new supply chain partnerships for a steady and reliable access of display panels.”

Read more in the full article here.

MacDailyNews Take: Wait, how did we go from “serious threat” to “not very threatening” in seven sentences?

Related articles:
Samsung Electronics buys 3% share in Apple-supplier Sharp for $112 million – March 6, 2013
Samsung Electronics may buy stake in Apple-supplier Sharp – March 5, 2013
Analyst: Apple a ‘prime candidate’ to adopt Sharp’s IGZO display technology in future devices – January 8, 2013
Hon Hai’s Terry Gou says investment talks in Sharp still on – December 5, 2012
Qualcomm to invest up to $120 million in Sharp; help with development of IGZO display technology – December 4, 2012
Sharp boosts IGZO display output; shares soar – October 22, 2012
Sharp tips highly efficient ‘iPad min’ IGZO screen tech – October 17, 2012
Is Sharp exhibiting high-res iPad mini IGZO displays? – October 2, 2012
Sharp’s IGZO display production issues forced Apple settle on Plan B for new iPad, says expert – May 7, 2012
Analyst: Retina display production issues persist for Apple iPad – April 23, 2012
Sharp announces production of world’s first IGZO LCD Panels – April 13, 2012
After using Apple’s new iPad with Retina display, old iPad screens become absolutely unacceptable – March 30, 2012
Apple ‘iTV’ beckons as jackpot in Hon Hai’s Sharp gamble – March 28, 2012
Foxconn-Sharp partnership likely targeting Apple orders – March 28, 2012
Taiwan Apple supplier Hon Hai becomes Sharp’s largest shareholder with 10% stake – March 28, 2012
Apple to unveil smaller 7.85-inch iPad this year, says anonymous Samsung official – March 13, 2012
Wow, Sharp sure is ramping up IGZO display production for some reason – March 2, 2012
Apple iTV unlikely to launch in 2012 due to IGZO display panel manufacturing concerns, sources say – February 3, 2012


    1. What Samdung’s investment in Sharp buy’s is inside info on what Apple is doing at Sharp, it’s another nail in, the bring home the fab of critical parts back to America, Apple how many backstabbing is it going to take. If the Germans are
      able we can too.

      1. unfortunately, it’s only mac pro line. others are remained in China. what do you think how many mac pro has been sold so far? it’s very expensive. nobody buys. apple should bring all popular lines (iphone, ipad) in american soil. plus, they should cut the price. otherwise they will lose, and the gap will be more wider. people don’t want to buy expensive stuff nowadays. look at economy, and yourself what you do with money.

          1. Apt name. How about “Take an English lesson. It’s a very good investment”. You know, capitalization, verbs and prepositions do help when you’re being a smarmy douche.

            Oh, and Edward is on point, too. Dick.

        1. Simmer down, we’re not used to cultures like yours where IP theft is normal business.

          This is just Samsung flexing making a show. They can’t conceptualize themselves out of a paper bag, so all they can do is show some bravado on the production side of the equation. They’re a bunch of soulless engineers that can’t put their own egos aside and deliver a modern tech eco-system.

  1. Sanrdung are so devious, as soon as I saw the story afew day back that’s the first thing I thought.

    Shitsprung buys into sharp and they get a share of apples business indirectly.

    Apple should make their own displays.

    I said this years ago – why Steve jobs didn’t do this is beyond me. They could then sell them to sharp or other companies.

    1. A deal in the works between Foxconn and Sharp was recently called off because Sharp didn’t want to cede influence over operations to Foxconn, which was planning to take a 10% stake.  Now in this story, Samsung is able to leverage a far smaller 3% stake into virtual control over Sharp’s product.

      Apple has about five (5) suppliers of iPad and iPad Mini screens, and for the iPhone depends heavily upon LG and other screen makers in addition to Sharp and Samsung.  In short, nobody has a choke-hold on the display screen market, regardless of what Samsung and Sharp do.

      Finally, the story also includes several factual inaccuracies — e.g., the processor comprises 25% of the cost of manufacturing iPhone, while the actual figure is closer to 5-7%.

      In short, this is just another bogus Apple story, written by someone who lacks the facts and analytical skills to handle the subject.  Don’t bother …

      Like so many Motley Fool articles, it was written by a fool for other fools to read.

  2. Apple should just buy the whole of sharp – period and Obsorb it into Apples Eco system and bury the sharp brand.

    That way they become a display maker and a direct competitor for sunshun

  3. Apple should be using that cash pile to buy LG,right in Samsung’s backyard,ensuring screen supplies.Whatever the mid term future holds,they will always need screens. Also ,why not make their own chips? Chips & screens will help prevent copying any tech leaps in these 2 key fields. Secure the supply chain,inovate & protect your proprietary IP. It would also add some margin gains. The inaction by Apple re acquisitions to control the supply chain & innovations therein is…….not inspiring

    1. Apple already design their own chips. Setting up a chip fab factory is hugely expensive; far better to have a variety of fab sources for desktop and mobile chips so that in the event of a problem at one source another can be used: see tsunami problems in the Indian Ocean and Japan.

  4. Did Samsung just get played? Remember how apple plays with every other company spreading rumors so company spend (or waste) their money in useless technologies?
    What if apple is just pretending being interested in sharp and keep using LG’s displays and sammy just play fool with their investment?

    1. I thought the same thing when I saw the headline a few days ago.

      I would love this theory to be true. It would make so much sense if they hired a marketer to just send these clueless thieves down horrible paths.

      To go a step further, Apple should show some interest in NASA so asian investors will dump money into our space program. Think of the possibilities.

  5. Apple’s biggest mistake was not cloning Steve Jobs. This massive oversight will cause the largest implosion and greatest failure of any company since the beginning of time. To avoid the utter shame and remorse of Apple’s inevitable demise all fanbois should commit seppuku with their track pads.

    1. American’s do not follow the teachings of the samurai. If that was the case, all of Wall Street would have their intestines hanging out by now. Americans do not take responsibility, they like to blame others. That’s their honorable way.

      1. Virtually no one follows the teachings of the samurai anymore. Even the samurai changed in the face of technology.

        While it is true that some Americans do not take responsibility, I suggest that character is far more widespread than just in the U.S.

  6. MDN, here are the seven sentences explained, courtesy of The Eagles:

    Well, we’re scared, but we ain’t shakin’
    Kinda bent, but we ain’t breakin’
    in the long run
    Ooh, I want to tell you, it’s a long run
    in the long run
    in the long run.

  7. Apple really should use its Cash Hoarde for some manufacturing acquisitions. Why sit on this much $$$? Is Tim Cook so timid to buy up other companies in order to protect Apple’s future. Stop playing so nice and goody. Show some teeth.

  8. All I see is pressure being applied towards Apple in an effort to force them to divulge their plans. A 3% stake is chump change and merely a way to make sure Scamsung stays near enough to Apple so they can continue to copy/steal. “Keep your friends close but keep your enemies closer”.
    The same can be said by all the downward pressure from the market. Everyone knows Apple is on the cusp of some new product/service/innovation but what exactly is anyones guess. All I see is pressure to force Apple to divulge their plans, while Scamsung makes sure they stay just close enough to look over their shoulders…

  9. A couple of years ago, Apple announced they put over a billion into Sharp to build a plant for producing retina displays for iphone. What is the situation with that now, I wonder?

  10. …..why would Sharp take investment from Samdung who is their biggest competitor? Isn’t that kind of like RIMM taking investment from Samdung? Yes, Sharp is between a rock and a hard place, but I don’t think 3% is anything to worry about.

    From Sharps point of view, I would say that 3% is nothing that can force them to do anything. What power does 3% give Samdung? Nothing!

    From Samdung’s point of view, I would say…….hmm I really don’t see what the hell Samdung gets from this.

      1. So you are saying that Sharp agrees to report all Apple proceedings to Samsung for 3%? Or are you saying that 3% gets a Samdung friendly board member on Sharp’s board?

  11. The greatest threat is if that three percent gives them access to apple’s strategy. This might give them. A Eric the mole type of inside look to future products.

    1. Ok, genius, I’ll bite: Exactly how will a 3% interest in a Japanese company by a Korean company give the latter insight into the strategy of an American company. Your answer should be based on the real world, and real law, and not something you saw in a movie or tv show.

      1. Knowing the the type of products Apple is asking Sharp to build: screen type, size, number etc will give them a heads up on what apple is planning.

        I don’t know what exactly sharp builds but imagine if apple ordered a bunch of 5 inch phone screens…
        they’ll instantly know apple is going for bigger phones.
        or if they are ordering iWatch components…

        note too that it takes months for production to start a and ramp up (Foxconn for example took a long time to get the laser cutters together to build the first unibody macbooks) so Samsung gets a nice long heads up (and adjust their strategy accordingly).

        1. So much for that corporate firewall… I mean, really?????
          Any amount of investment allows them to sit in on quarterly conference calls. As a stock holder (even with only 1 share) a person can easily sit in on that call. Fortunately for Apple they NEVER tip off the investors by announcing future product plans on those quarterly calls, other companies do, though…

          1. I didn’t write about conference calls etc.

            I’m saying if apple gives sharp “confidential’ orders to build something, having 3% will give them a heads up.

            from what I gather the 3% isnt what you’re suggesting like someone buying 3% of the share on the open market. It’s more like a joint venture thing which allows them a lot more access than a general shareholder who has to get info just from ‘conference’ calls.

            “Samsung’s modest $111 million investment in Sharp, announced on Wednesday, will thus not only give it access to the Japanese company’s technology it will turn up the heat on its own display unit … it will give Samsung a broader supplier base, access to Sharp’s low-cost thin-screen technology, and a foot in the door at one of Apple Inc’s key Asian display suppliers.”

            They’re going to learn a heck a lot more and much much faster than waiting for conference calls.

            1. @jeff

              looking at your post again and my reply I would like to say I don’t mean to be argumentive, perhaps I did not understand what you are getting at.

              looking at your other posts I sort of agree with some of what you are saying.

            2. @ donkey
              No problem, I should have clarified that I ws COMPLETELY agreeing with you and just adding a bit of “how it is done” to what you were saying. Quarterly calls report revenue and where it is derived from. It would be simple enough to deduce Apple’s plans from extra revenue derived from an increase in sales for, say, 5″ screens, or whatnot.

      2. More likely would be that Scamding see’s a potential innovation with regard to LCD panels/production tech from Sharp and they want access to the knowledge. Real enough for you now? Corporate espionage is real, anyone who owns a business with an advantage over their competitors will attest to this fact.

        1. Actually, none of you answered my question, altho you are certainly celebrating with the back-pats. The answer is this: It doesn’t. Simply owning shares in a company entitles you to absolutely no more information that must be supplied to the securities regulatory agency in the given country. And that is basically available to everyone. By buying 3% of Sharp, Samsung is not entitled to any more information that it would have gotten by analysis of public records or by “industrial espionage.” In other words, this is essentially a non-story (the point of MDN’s take).

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