Why Apple and Samsung Still Get Along, Behind the Courtroom Battles

After suing each other for the last few years in various courts around the world, you'd think that if Apple and Samsung were human beings they would have walked away from their rocky relationship a while back. The Wall Street Journal explains (beside the larger fact that they're both huge companies with complex links, rather than a squabbling couple) why it's so hard for Apple to take up with another supplier. Things are starting to look different, though: "Apple's deal this month to start buying chips from TSMC is a milestone. Apple long wanted to build its own processors, and it bought a chip company in 2008 to begin designing the chips itself. But it continued to rely on Samsung to make them. ... TSMC plans to start mass-producing the chips early next year using advanced '20-nanometer' technology, which makes the chips potentially smaller and more energy-efficient."

Comments

It's because Steve is gone

[kthreadd]

Now they are just riding it out, both laughing all the way to the bank.

Re:It's because Steve is gone

[Anonymous Coward]

Alliance: two thieves who have their hands so deeply insert into each other's pockets that they cannot separately plunder a third.

Re:It's because Steve is gone

[arbiter1]

Um, not really, Apple needs Samsung, Samsung doesn't need apple. Samsung is one few companies that can keep the demand apple has for chips in its phones. Going from company size, Samsung is much larger and worth a lot more considering they make so many products where as Apple 95-98% of their profits are from 2 product's

Re:It's because Steve is gone

[Guy Harris]

Alliance: two thieves who have their hands so deeply insert into each other's pockets that they cannot separately plunder a third.

That sounds like something out of Ambrose Bierce's Devil's Dictionary.

That's because it is.

Re:It's because Steve is gone

[devleopard]

Samsung's stock took a 6% hit, or $10B in market cap lost, when it was RUMORED they were losing Apple chip contract last year:

http://www.reuters.com/article/2012/05/16/us-samsung-chips-idUSBRE84F0BT20120516

Perhaps Samsung doesn't *need* Apple, but they are a major customer and a major source of revenue. Kinda like saying WalMart doesn't *need* to have stores in Texas or California.

Re:It's because Steve is gone

[Savage-Rabbit]

Um, not really, Apple needs Samsung, Samsung doesn't need apple. Samsung is one few companies that can keep the demand apple has for chips in its phones. Going from company size, Samsung is much larger and worth a lot more considering they make so many products where as Apple 95-98% of their profits are from 2 product's

Samsung's electronics division is a mini corporation within the Samsung empire that cares more about what Apple is doing than what most of the rest of the Samsung empire is doing. At the moment Samsung is making a bundle off of every iPhone, iPad and iPod sold by Apple on top of what they are making from their own like of tablets and smartphones and that has to count as a pretty nice win-win situation. I can't imagine that the bean counters at Samsung are happy at the prospect of a major smartphone and tablet computer manufacturer who commands 20% of the smartphone market and 40% of the tablet computer market (and the lucrative high end segments of those markets at that), will in future be spending money that previously flowed into Samsung 's coffers with Samsung's competitors.

Re:It's because Steve is gone

[Jah-Wren Ryel]

Samsung's stock took a 6% hit, or $10B in market cap lost, when it was RUMORED they were losing Apple chip contract last year:

Are you seriously trying to imply that the stock market in the short term is an objective measure of, well, anything other than the emotions of the participants?

Re:It's because Steve is gone

[maccodemonkey]

Um, not really, Apple needs Samsung, Samsung doesn't need apple. Samsung is one few companies that can keep the demand apple has for chips in its phones. Going from company size, Samsung is much larger and worth a lot more considering they make so many products where as Apple 95-98% of their profits are from 2 product's

TSMC plans to start mass-producing the chips early next year using advanced '20-nanometer' technology, which makes the chips potentially smaller and more energy-efficient.

Seems Apple doesn't need Samsung.

Re:It's because Steve is gone

[JonnyO]

Arrangements like Apple's and Samsung's may sound strange at first but it happens a lot more than one might think. I work for a very large French company that has its own in-house IT services group, yet my subsidiary handles the majority of its IT operations on its own, including using external hosting companies and service providers that directly compete with them. We can get away with it because we execute faster, with better flexibility, higher quality, and for less money.

BTW, controlling the manufacturing isn't the advantage some make it out to be. It's a very low-margin industry, which is why so much of it is done in low-wage places like China. If bringing manufacturing in-house had strategic value then you can be assured that Apple and any other company with a decent mountain of cash would work on acquiring such capabilities. Take a look at Sony- nobody is citing their in-house manufacturing as a key differentiator or advantage.

It's because of Steve

[tuppe666]

Now they are just riding it out, both laughing all the way to the bank.

Wow. Ironically Apple could have manufactured themselves under Steve Jobs regime but instead chose through cost saving go elsewhere(Samsung). They famously laughed at the president at the suggestion of bringing Apple Manufacturing to the states, and now are having the unpleasant sunrise of of their top (and only) phone looking mid range and 12-18 months out of date at launch. While Samsung refresh a product range every three months. Now thousands of patents are on various hardware components by various Korean and Chinese companies....with Apple having relatively few design & interface patents, admittedly with a friendly court system looking favourably at them.

Thankfully Jobs does not have to live with the consequences of this...as he died, but in context of going to the bank article...Apple is going to the bank with less profits (less market share, less market cap, less brand value, less cutting edge, less interesting products, less news, less innovation). At least Dell finally got to say I told you so.

Re:It's because of Steve

[Anonymous Coward]

Here's a decent blog post that I concur with as a multi-platform developer. Time to tuck away that phanboy attitude and open your eyes to the world of tech, it improves your health (always happy to hear of any new tech!) and smells a lot less like shit too! http://www.passion4teq.com/articles/ios-android-development-comparison-1/

How to make money and lose business outsourcing

[Cassini2]

A simple sure-fire plan:
1. Outsource all of your core competencies - parts, production, everything. Keep nothing in house.
2. Profit!!!
Quietly, suppliers start selling direct to customers to make more money.
3. Find cheaper suppliers - more Profits!!!
Discover your original suppliers now sell a better product.
4. Liquidation sale! More Profits!!!

Last Step:
1. Write a business school textbook, preaching the virtues of the first 3 steps.

Why would they?

[tuppe666]

'Or are you too dumb not to question why a company that makes the CPUs and retina displays for Apple can't use them in their own product line.

Apples CPU's are measurably slower tham the Samsung Galaxy SIII Samsung last generation product and retina Display has become synonymous with Low DPI as 1080P becomes the new normal for Android.