Apple's odd symbiotic Samsung relationship

Apple's odd symbiotic Samsung relationship

Summary: Apple has reportedly become Samsung's biggest customer in a move that can boggle the mind. How can Apple, a rival of Samsung's electronics unit, also be the largest customer? And how long can this scenario go on?

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TOPICS: Hardware, Apple, Samsung
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Apple has reportedly become Samsung's biggest customer in a move that can boggle the mind. How can Apple, a rival of Samsung's electronics unit, also be the largest customer? And how long can this scenario go on?

According to the Korea Economic Daily, Apple is poised to buy $7.8 billion in components from Samsung. These components range from liquid crystal displays, application processors and flash memory used in the iPhone and iPad.

If you bring this up in conversation, the Apple-Samsung relationship can become a headscratcher. Apple's iPhone battles Samsung's Galaxy phones. The Galaxy Tab takes on the iPad. Meanwhile, Samsung's tablets can't match the iPad on price---even though the Korean electronics provider has many parts lying around the company. Apple CEO Steve Jobs even knocked Korean companies last year. I presume Jobs didn't mean Samsung specifically.

During Apple's antennagate press conference, Jobs said:

“I guess it’s just human nature, when you see someone get successful you just want to tear it down. I see it happening with Google. Google is a great company. Look at everything they’ve created. Would you prefer if we were Korean companies? Do you not like the fact that we’re an American company leading the world right here?

How is this Apple-Samsung thing even possible? Apple certainly wouldn't sell components to Samsung if the roles were reversed. If you carry this line of thinking out to an extreme Apple could squash Samsung with its own parts. It's wacky.

Welcome to the world of conglomerates. Chances are Samsung's chip unit has no idea that the LCD division is also selling to Apple. These parts are only surfaced in some system rolling up financial results.

Everyone is making money so there's nothing to worry about here. Samsung would be nuts to cut off its largest customer in the name of making a few points of margin on a device. But this whole Apple-Samsung does make you scratch your head a bit.

Related: Samsung won't quietly cede ground to Apple

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Topics: Hardware, Apple, Samsung

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32 comments
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  • RE: Apple's odd symbiotic Samsung relationship

    But Apple followers would make you believe that Apple creates everything in the iPhone.
    tatiGmail
    • huh??? that comment made me scratch my head scratch.. lol..

      @tatiGmail.. Apple DESIGNS and specifies a lot of things.. i think everyone understands that they manufacture, almost nothing.. you even see Steve Jobs even referring to apple as system integrators.. that comment makes very little sense or bares almost nothing to do with reality and what people think..
      doctorSpoc
    • More lies from the Apple Haters Group (AHG).

      @tatiGmail

      Yea. Right.
      Bruizer
    • At most of parts Apple develops its own production process/technology

      @tatiGmail: implements it with manufacturer and tracks how it is executed.
      DDERSSS
    • RE: Apple's odd symbiotic Samsung relationship

      @tatiGmail
      And you think Google makes everything. Huh
      Ram U
    • RE: Apple's odd symbiotic Samsung relationship

      @tatiGmail
      lol Its funny how their relationship is called 'symbiotic' .. anyways I believe android will ultimately outperform apple
      <a href="http://irctcpnrstatus.info">irctc pnr status</a>
      broom87
  • Apple makes many orders to specs of their own designs..

    sure some of the stuff is off the shelf.. but Samsung can't simply start selling or using Apple's designs (much of which is patented or patent pending) in their own or other's products..

    the other thing is that Samsung buys and manufactures their products in Korea.. Apple buys their parts where ever they are the cheapest or where the expertise is the produce them.. some of the displays tech is only available from Samsung.. but Apple manufactures in China.. and gets parts from china as well..
    doctorSpoc
  • What's hard to figure here?

    There is nothing whacky about it. Samsung sells parts, THAT is their business. And I am sure they are giving Apple a better deal on volume than they can even give their in-house brand. You think any sane company is going to say no to billions of dollars in business, not to mention the good PR of having it's parts in Apple's popular products, because they also make finished products that compete with its biggest buyer of parts? That would be a big no.

    Chances are everyone at Samsung knows exactly who they are making parts for and anyone expressing a problem with that fact is promptly shown the door.
    oncall
    • Samsung sells their own line of televisions

      while selling parts and screens to competing companies like Insignia, so nothing new here.
      John Zern
      • Samsung and Sony LCD panels come off the same production line..

        @John Zern
        doctorSpoc
      • Scandelous!!

        @doctorspoc

        I also hear Samsung sells memory chips and hard drives, all while selling finished laptops! How can this be?! They have no shame!

        ;)
        oncall
  • That's easy to say

    [i]Apple certainly wouldn?t sell components to Samsung if the roles were reversed.[/i]
    Seeing that Apple doesn't have that capability, that's easy to say.

    [i]If you carry this line of thinking out to an extreme Apple could squash Samsung with its own parts. [/i]

    In what way? Apple, Galaxy, or both: Any way you look at it, Samsung's making money!

    This is nothing new companies do it all the time. Samsung's a good example: making parts for Apple; selling assembled phones to competing carriers, some even running WP7, an MS operating system, some with Android, Goolge's OS.
    John Zern
    • yeah, that left me scratching my head too..

      @John Zern how the hell can Apple selling 100s of millions of devices equipped with part that they bought from Samsung put them out of business?? how can selling multiples of 100s of millions of parts (many billions of dollars) to Apple be construed as being bad for Samsung?

      if they can sell on top of those parts value added, high volume devices on top of their part business then great, but i'm having a really hard time figuring out how guaranteed multi-billion dollar sales to Apple could ever be construed as being bad a bad thing..
      doctorSpoc
  • RE: Apple's odd symbiotic Samsung relationship

    "Apple: Made in Korea" just doesn't have the same ring to it...
    coreytodds
    • No.. made in China.. Korea i far too expensive..

      @coreytodds ..that's one of Samsungs hurdles, they do manufacturing in Korea.. Apple buys Korean specialty parts but assembles in China..
      doctorSpoc
      • &quot;Apple: Anything but American&quot;

        Go Steve.
        klumper
      • That's true of all of them

        Dell, HP, Lenovo, etc... Not just Apple.
        LTV10
  • RE: Apple's odd symbiotic Samsung relationship

    I wonder if Apple gear is carried across the ocean in ships made by Samsung?

    What a pointless article, one of Samsung's businesses is as a component supplier, they don't only supply Apple but also other companies they compete with, in other fields such as TV's.

    A4 = Hummingbird the result of an Apple Samsung collaboration.
    alsobannedfromzdnet
    • agreed.. this article is a real head scratcher..

      @alsobannedfromzdnet
      doctorSpoc
  • Talk about dis-information...

    <i>Apple certainly wouldn?t sell components to Samsung if the roles were reversed.</i>

    I will bet you $1 that there are Apple devices somewhere within Samsung. Be it laptops, iPads, iPhones or desktops. Be it that Apple does not sell components but finished system parts, why even contemplate it? If Apple sold components, they would sell to the people that wanted to buy them.

    BTW: You would loose.

    http://www.sears.com/shc/s/p_10153_12605_05798010000P?sid=IDx20070921x00003a&ci_src=14110944&ci_sku=05798010000P#

    <i>If you carry this line of thinking out to an extreme Apple could squash Samsung with its own parts.</i>

    That line of thinking is already flawed.

    <i>It?s wacky.</i>

    So was this blog.
    Bruizer