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Samsung Hits Apple With 20% Price Increase

Posted by samzenpus on from the pay-up dept.

EthanV2 writes "The Wall Street Journal cites a report which quotes a 'person familiar with negotiations between the two tech giants,' apparently confirming this special price hike for Apple. The source said: 'Samsung Electronics recently asked Apple for a significant price raise in (the mobile processor known as) application processor. Apple first disapproved it, but finding no replacement supplier, it accepted the [increase].'"

5 of 447 comments (clear)

  1. Re:So???? by Missing.Matter · · Score: 5, Informative

    That's the iPhone 4. The iPhone 5's A6 chip (two generations newer) costs an estimated $17.50. So a 20% increase is $3.50.

    http://www.isuppli.com/Teardowns/News/Pages/Many-iPhone-5-Components-Change-But-Most-Suppliers-Remain-the-Same-Teardown-Reveals.aspx

  2. Re:one word by gstoddart · · Score: 5, Informative

    After that, Samsung loses the contract once and for all.

    I believe Samsung has already told Apple they'd be terminating the contract next year or so ... so it's not like they're at risk of losing a contract they've already decided they don't want any more.

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  3. Re:one word by oxdas · · Score: 5, Informative

    All of Apple's contracts combined (display, processor, memory, etc) only account for about 3% of Samsung's annual revenue and probably less than 1% of their profits (components are typically low margin). While Apple is a big customer, they aren't really a "golden goose" for Samsung.

  4. Re:Inevitable by oxdas · · Score: 5, Informative

    According to Samsung Electronics, two-thirds of their $6 billion in profits last quarter came from their smartphones.

    This is about the same percentage for Apple, the iPhone, and their $8 billion in profits last quarter.

    http://www.bloomberg.com/news/2012-10-25/samsung-profit-beats-estimates-on-surging-sales-of-phones.html

  5. Re:one word by thoughtlover · · Score: 5, Informative

    So far, Tim Cook is making QUITE the splash.

    IIRC, Tim Cook was the guy that thought ahead to procure large inventories of flash memory. That kept the cost low and ensured they could meet consumer demand --something Apple has famously struggled with. This patent spat was initiated by Jobs, not Cook (remember Jobs saying he'd use the last cent of the company to sue any other company using 'their' ideas??). Cook has the option to make peace and get back to making computers, not enemies.

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