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

54 Comments

    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.

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