Samsung muscles in on Apple suppliers; could disrupt Apple product launches

“Overtaking Apple Inc as the world’s leading maker of smartphones has stretched Samsung Electronics Co’s in-house supply lines, and the South Korean firm is now courting some of its rival’s main parts suppliers,” Miyoung Kim reports for Reuters. “After costly courtroom battles over technology patents, the two gadget giants are now going head-to-head over securing the best supply of parts as they jostle to rule the $253 billion smartphone market.”

MacDailyNews Take: “After?” The courtroom battles continue, honey, unfortunately at a glacial pace, but inexorably nonetheless.

“Trampling on Apple’s supply patch could make life tough for the U.S. firm as it prepares for its next product line-up including a cheaper iPhone for emerging markets such as China. Having Samsung muscle in on its suppliers could drive up costs and lead to component bottlenecks, disrupting product launches,” Kim reports. “‘The next round of the post-patent battle for them will be over component supplies,’ said Lee Sun-tae, an analyst at NH Investment & Securities. ‘Who wins access to the best performing components in class in large quantity – that’s the key … and explains why Samsung is shopping for components more than ever.'”

MacDailyNews Take: “Post-patent battle?” Again with the wishful thinking, this time from a Seoul based securities firm, as quoted by a Seoul-based “reporter.”

Kim reports, “Sharp, in which Samsung bought a 3 percent stake earlier this year for $110 million, said this week it was seeking to boost sales to the Korean firm, potentially souring the Japanese company’s ties with Cupertino, California-based Apple. Samsung is also using more chips made by Qualcomm, another major Apple supplier, in its flagship Galaxy S, which went on sale late last month.”

“For sure, Samsung still buys the majority of its components in-house, and the overlap with Apple on external suppliers is, so far, limited. BNP Paribas estimates that more than 80 percent of component profits generated by Galaxy S4 sales go to Samsung itself and its units. But even a tiny overlap can be damaging,” Kim reports. “For example, Taiwan’s HTC Corp, which has slipped out of the top-10 smartphone makers, reported a record-low quarterly profit last month after delaying the full launch of its flagship model due to a shortage of cameras.”

“Despite the lukewarm reviews, consumers keep snapping up the S4, according to carriers,” Kim reports. “For the first time in at least three years, Samsung last year spent more on marketing than on research and development, seeking to pick up market share in the absence of new, competing models from Apple.”

MacDailyNews Take: You know, because an iPhone released 34 weeks ago is an “old” model.

Full article here.

MacDailyNews Take: Just wondering: Does Samsung pay Miyoung directly or do they go through Reuters?

43 Comments

  1. Dear MDN… the bias with you is strong. For you to claim that others are biased is beyond irony.
    You try to be a bit more objective imo.

    Just keeping it real with ya. It’s a bad look.

    And I’m an Apple fanatic as well as stock holder.

    1. The site wears its bias on its sleeve, not veiled in a cloak of presumed objectivity. Your comment makes no sense. And I’m an apple fan and stockholder too!

      1. Agreed! Although I will say that Samsung has a deeper understanding of Japanese business culture. It’s all about relationships and trust and integrity in Japan. If you can build a solid personal relationship, the business relationships are smoother, in tough times and good times.

        Sharp essentially, owes Samsung now. If Apple wants to grow, they have to make Smart acquisitions in the manufacturing of key components of its products.

        1. We don’t know what Apple has invested in Sharp (or other companies) and what exclusive contracts they have signed. You shouldn’t read too much into one data point.

    2. Dear JJ, MDN is named MacDailyNews for an obvious reason. It’s not claiming to be an independent news organization like Reuters.

      You do know the difference, don’t ya?

    3. This blogging site is MDN’s not yours,
      though your comments are welcome and free to express,
      shouldn’t the owners be able to also?

      As this is the nature of the site.
      To provide Apple News – and – opened for comments.

      Bias or not – I think you stepped in doggy doo doo here.
      Pulling rank has no real weight in your defence, then again, its’ great knowing you are dedicated and happy to Apple.

  2. let’s see:

    three years after samsung started to come in strong apple is still buying components from them in large quantities.

    with almost 150 bn in cash apple has effectively stopped advertising. (here in germany the s4 ads are everywhere, apple’s are non existent).

    with 150 bn in cash apple let samsung take control of crucial supply chain partners (like sharp), having their money sit around idle instead of using it for a fight.

    samsung is taking the world by storm while apple seems to be doing nothing.

    a fanboy is losing faith…

    1. Very dramatic.

      You do know Samsung was offered a long term relationship to supply components to Apple, and Apple has seen that deal through.

      You do know Apple offered its iOS to Samsung at an unbelievable licensing deal, yet they refused.

      You do know Samsung stabbed Apple in the back to compete with a free OS (Android) that was not yet proven legal or infringing to Apple.

      You do know Apple is in several legal battles to this day, and its starting to lean in Apples favour.

      You are aware Apple holds several patents for its devices, though Samsung seems to rely on Googles acquisitions to strengthen the OSes legal positions.

      You are aware Apple can us its 140 Billion to practically do as it pleases. The moves Apple does to secure supply chains is money and relates to innovations which it seeks to improve its line. Samsung doesn’t know exactly where Apple is headed nor do you? Its a business war, and you assume Apple is doing nothing?

      Lacking in advertising in one region may have good reasons. I believe Apple has placed many TV ads all over the world… I cant believe you can think it as effectively stopped?

      You do realize Samsung has been fined with copying Apple design appearance to confuse consumers with regards to Samsungs lower end, older models.

      Do you believe Apple is doing nothing?
      Really, do you think Samsung is a storm of innovations and taking over the world – essentially winning because of all this Samsung Advertising?

      Lastly, Samsung owns a 3% stake in Sharp… do we know what investments and deals Apple has with Sharp?

      You don’t know what Apple is up to, no one does.

      Its kind of like God, he is there, you don’t see him, you don’t know what he is doing… is that any reason to lose faith in God?

      If you don’t believe in God, thats fine, but then you don’t just simply lose faith in what you love and believe unless you already decided. You can’t be a fanboy if your trust in Apple is fading… it makes you a disbeliever, a doubter, a non-fan.

      1. I lost faith in god when he made me an atheist and I lost preference for iPhone when I got my head out of Apple’s bunghole and looked around and asked myself why am I so beholden to this one way of doing things.

        1. You do what makes you happy bud. I choose not to put my head in any hole – sorry to hear you like that sort of thing. I guess its easier to chose wrong from right. Easier to be negative then to be positive. Easier to be lazy then to work. Yup a pretty little atheist, bound to change that thought on your death bed though.

          Funny, God never made you an Atheist, you made that choice for yourself. Entering the world was neither your choice nor Gods. Your parents brought you into this world, that was their decision.
          Ending your life will be natural or again of your choice – not Gods.

          God, if there is one, created life to occur and choices to be made… for that reason you could be grateful to God… yet again you decide to choose not to. Nothing wrong it that. But it is sad. And lacking hope or promise and has no positive value for humanity.

          Personally, comparing the two platforms I still can not see why anyone would want anything but Apple. Specially at the same cost?

          And what way of doing things is so profoundly different that took you away form one platform to the other. I am sure its a temporarily satisfaction with your purchase? I see, you are the type of person who doesn’t look forward in life but lives in the moment of time. Sounds happy until… well, good for you.

          1. MacDaily News-ites forgive me–this argument is not for here but, actually ‘Sweet Jesus’ in all seriousness I don’t like conflict with good people like you who believe as you do because that’s your right and I have mine.

            stoicatheist.wordpress.com

            again my apologies to the MDN-ites.

      1. let’s see:

        – he let the maps pr debacle happen
        – he f*cked up the new imac introduction
        – he let the stock fall more than 40% thus enabling a media storm claiming that “apple is in trouble”
        – he implemented a strategy where apple introduces all its new products in one quarter and nothing, i repeat NOTHING, in the succeeding quarters thus allowing the media to claim that “apple has lost it”, “isn’t innovative anymore” etc.
        – missed the boat on the trend to bigger screen sizes for smartphones
        – didn’t come up with a midrange iphone choice for emerging
        markets
        – let samsung control the message in advertising and the media
        – let samsung buy a stake in crucial suppliers like sharp
        etc.

        now your turn: what did he do right exactly?

        1. I do agree, as a CEO his leadership on several issues were not right in my opinion.

          CEOs, however, are not appointed by oneself. Tim does not elect himself for the position to reign at Apple. Votes within the company and shareholders do that. And currently, thought my opinion disagrees with Tims decisions; I think Tim is extremely important for securing the supply chain issues at present.

          One example, simply put. Key members responsible for Maps guide the team and progress reports sent to the CEO. Yet as CEO, I can not imagine projects moving forward without approvals from the top. There is no way Tim had no idea about the issues Maps. He must have had some indication prior to its launch. The project should have been marked as Beta. The blame is on him, though media wise TIm fires the team leader.
          This would be one example that I disagree with Tim.

          Ultimately, overseeing all aspects of the projects at Apple is part of Tims’ duties. Keeping the teams happy and productive would be wise.

        2. – he let the maps pr debacle happen

          • Tim should be blamed for the approval of Maps.
          But he is not responsible how the media coverage of the software.
          Tim did handle the PR of Maps well, the resulting solution firing important members was not right. The success of Maps lies within him.

          – he f*cked up the new imac introduction

          • As a supply genius perhaps Tim did screwup – always have a backup Tim. I think the production manufacturing yields messed up on Tim for whatever reason. He did what he could. Yet again, yes, anyone else would have been fired form their position for that.

          – he let the stock fall more than 40% thus enabling a media storm claiming that “apple is in trouble”

          • I can’t agree on this one. Tim doesn’t nor does anyone control the stocks.

          – he implemented a strategy where apple introduces all its new products in one quarter and nothing, i repeat NOTHING, in the succeeding quarters thus allowing the media to claim that “apple has lost it”, “isn’t innovative anymore” etc.

          • I am unaware of this strategy – sounds odd – but if true poor judgement on Tims part yes.

          – missed the boat on the trend to bigger screen sizes for smartphones

          • sorry again I can not agree with you here, I don’t know what Tim/engineers/designers plans to do other then it seems Apple is quite happy with the already recently increased iPhone size. The invested Aluminium frame could be reasons to remain the size. Supply orders on retina screens could hinder issues for size change. Apple provided reasons to keep the width for one handed use. Thats what they gambled for. YOu think they lost – you coudl be right? I think Apple has reduced iPad to a mini showing the opposite to Samsung that small is sweet. However, iPad Mini could be a very large iPhone/Phablet. If they wished.

          – didn’t come up with a midrange iphone choice for emerging
          markets

          • I think you are too early to say this.

          – let samsung control the message in advertising and the media

          • Tim does not control what Samsung spends on or picks as advertising.
          I feel Samsung advertising truly hits a wall. Its not funny, its uninteresting, it looks cheap, the advertising says nothing about the benefits or advantages of the phone… I think Samsung advertising is a useless wasted of time and money.

          – let samsung buy a stake in crucial suppliers like sharp
          etc.

          • Tim again can not control what Samsung wishes to invest in. There is no indication other then rumours what Apple is doing. The doubled down tighter security is also hurting Apple fans.

  3. Eh, MDN’s comments are just a distraction from the actual points, as if wishfully hoping in ongoing and future legal action is going to make supply issues go away. The fact is, Apple has had an increasing supply and production issue, something that Tim Cook is supposed to be a genius at. It was nice back in the day when Apple could lock up billions of dollars of parts and essentially keep them out of the hands of competitors. If those days are gone and other brands begin to lock up supplies that Apple needs for product launches, that will indeed be a problem.

    1. I believe Apple prepaid Sharp for components and encouraged Hon Hai to invest. Equity investment down the tube, if sharp goes under. Apple would have status as a creditor. For a long time Samesung was making its own chips, albeit paying licensing fees to QCOM. The fact it now has to go to QCOM is probably because Apple has moved production of its latest chips to TSM and Samesung no longer has access to the technology Apple is using.

  4. I’m sick and tired of this Tim Cook has to go bullshit. Exactly who do you have in mind to replace him? He’s been running Apple for years. Steve didn’t do the day to day stuff at all.

    Perhaps you are just Homophobic. That would answer a lot of questions.

  5. At this point Apple is starting to frustrate. The supply chain issues could have been solved. When Sharp reported their financial issues and required financing Apple could have purchased them outright with petty cash. If Steve was still here those are the types of aggressive moves he would be making. When I saw that Sharp was getting funding from Samsung I just couldn’t believe Tim Cook would let that happen. With all that cash they would have been able to control their own destiny with displays. No one would have knowledge or the working designs to copy. Apple needs to stop supplying its IP to its rivals. They outright copy it anyway. Instead, a new strategy will be to leave them guessing until the product is in the hands of customers.

  6. This site remains relentless in wishing that Apple was the company it once was. Those days have passed, MDN… Samsung is not the enemy. An inept CEO is the problem. Wall Street has written off Tim Cook and until he’s gone, the trend to ordinary and below will continue. The sooner some realization of that now proven fact sinks in the better the chances of Apple returning to the company it once was and you can again be justified in your now desperate claims about Apple Inc.

    1. Samsung not the enemy? What are you smoking?
      The company that has used every dirty trick possible to compete is most definitely a problem.

      Remember the last time Wall Street picked apple’s CEO? We lost Steve jobs and got one fuckhead after another. Cook isn’t the problem. The problem is bullshit like claiming a 32 week old phone is old news. The stupidity is astounding that declares it a smart move to never capitalize on a model, flood the market with tons of hardly differentiated versions, etc.

      Wall Street is just furious that the massive profits of apple keep it from being a perfect victim for Bain Capitol types of raids.

      Wall Street declared all of Steve’s moves wrong. They never once praised his moves. They praised sculley, and amelio. Remember those morons?

  7. (said in unnecessarily spoken out loud, euro-villian accent) “Excellent, it appears our cunning plan is going according to Shedyoole. Virst Apple, next, the Vorld”

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