Tensions between Apple and Samsung thaw, and the competition should be terrified
“The technology industry’s greatest rivalry may be turning into an unstoppable collaboration. Relations between Apple and Samsung Electronics appear to be thawing since the war waged by Steve Jobs forced these onetime corporate comrades to end lucrative supply contracts and engage in costly legal battles,” Ian King reports for Bloomberg. “In August 2014, Apple Chief Executive Officer Tim Cook agreed to begin winding down the patent suits with Samsung, and the two companies are teaming up again on new products.”
“Samsung will manufacture the main chip for the next iPhone, as well as displays for other Apple products, and it is budgeting $14 billion for new plants and equipment that are expected to accommodate, among other things, its big new client,” King reports. “From this alliance, Apple gets access to one of the biggest, most sophisticated chip manufacturing operations in the world to help it continue outselling the competition. Samsung gets crucial new orders for its core chipmaking group to make up for stagnating profit in mobile phones. Just about all other companies in the industry will suffer, starting with Taiwan Semiconductor Manufacturing and SanDisk.”
“Samsung has every reason to refocus on its roots as a chipmaker. As recently as June 2014, Samsung’s mobile phone division was providing more than 60 percent of the company’s operating profit. That slipped to 37 percent by the end of last year, with the semiconductor division picking up the slack to account for more than half,” King reports. “While Samsung has been losing market share to Apple in high-end smartphones, the South Korean company remained the world’s largest consumer of electronic components at the end of 2014. Apple was second. The two account for 17 percent of worldwide chip purchases, according to research firm Gartner. And they make up 40 percent of the smartphone market by units, according to researcher IDC. In other words, you can’t avoid them.”
MacDailyNews Take: You have to wonder how difficult it is for Apple brass to continue working with these thieves when they turn out such obviously iPhone-inspired devices like the Galaxy S6, just another in a long line of blatant knockoffs of Apple products. The allure of 14 nm FinFET chip stamping is obviously irresistible.
You know, with Apple’s many tens of billions of dollars accumulating rapidly offshore, you’d have thought that by now Apple could have built themselves quite the state-of-the-art chip fab(s) and amassed a world-class team of unparalleled semiconductor talent and been completely free of having to pay billions to those who, seemingly without an iota of shame, continually rip off your intellectual property and mimic your products with abandon.
We wouldn’t have any problem with doing business with Samsung, if they’d simply admit their wrongdoing, face significant consequences, and just stop ripping off Apple. In fact, Apple should make “stop the knockoffs immediately” a condition of doing future business.
Apple iPhone 6 (left) Samsung Galaxy S6 (right) (photo: GottaBeMobile)
