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Samsung increases Apple's semiconductor supply prices by 20%

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  • User profile image
    Bass
  • User profile image
    cbae

    Samsung has to raise that $1 billion that it owes Apple somehow.

    In the end though, Apple will still insist that the carriers sell the iPhone for the same price as high-end Android devices despite the inevitable increase in wholesale price, and everybody will have to subsidize iPhone users even more by paying higher monthly service rates.

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    magicalclick

    On top of that, Apple is going to pay Samsung damage fee for their misleading appoligy on their website.

    Leaving WM on 5/2018 if no apps, no dedicated billboards where I drive, no Store name.
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    Blue Ink

    @Bass: Yes, surprising on several levels. The most unexpected fact was that Apple couldn't find another supplier for the chip. Given the prospected quantities, it's hard to believe that nobody would be interested; either a cartel, or Samsung arm wrestling everybody else seems a lot more likely.

    Which is just food for further lawsuits...

  • User profile image
    cbae

    @Blue Ink: Cartel? Apple, itself, is a cartel. They have so many component suppliers by the short hairs, that they can dictate what percentage of a component manufacturer's output can go to Apple's competitors

     

  • User profile image
    Bass

    @Blue Ink:

    Cartels seem to be legal as long as patents are involved.

  • User profile image
    Blue Ink

    @cbae: a cartel of one is an interesting concept. If anything, Apple is a quasi-monopsonist and a cartel is the simplest way to counter that. It's fair game in my books.

    @Bass: no, they aren't. Which doesn't mean they don't exist.

  • User profile image
    elmer

    @cbae:Samsung would be well aware of the FAB capacities and their existing production commitments, so it may not require any Cartel-like agreement, as much as insider information.

    Apple could always decide to stump up with some of their deep cash reserves, and build/finance their own FAB plant/capacity, but they seem to prefer 'investing' in lawyers.

  • User profile image
    Bass

    @Blue Ink:

    So all these "I won't sue you if you don't sue me" agreements are illegal? To me it feels like a cartel.

     

  • User profile image
    Blue Ink

    , Bass wrote

    @Blue Ink:

    So all these "I won't sue you if you don't sue me" agreements are illegal? To me it feels like a cartel.

    I believe a cartel would require something like "let's cross-license our patents then use them to kick everybody else out of the market so we can charge ridiculous prices". Good luck proving that, though; it's difficult to distinguish between a company protecting its IP from one consipring with others to distort competition.

  • User profile image
    Ray7

    Not so sure about this one. Apple and Samsung signed a deal (so many millions of chips at a certain price) until 2014. If it is true then it's because Apple is no longer entitled to volume discounts because they've cut the supply orders. 

    http://news.cnet.com/8301-13579_3-57508009-37/apple-reportedly-cuts-order-for-samsung-chips-for-new-iphone/

    Since Apple's chip design division has scored a major hit with the A6 line, they could be thinking  now was is a  good time to seek new partners. 

  • User profile image
    cheong

    @Ray7:Apple can't find a new AP provider, so instead they seek other memory chips provider...

    From my previous experience when working with computer shop, Samsung is one of the better brand in terms of memory module stability and compatibility (with motherboards). Sometimes brands like Kingston will produce memory modules that made with Samsung chips when their production line schedule is tight.

    I think Apple will have a hard time finding memory chips provider that'll provide better C/P value than Samsung... Or let's see whether iPhones produced a few month later will have a higher frequency of "hang".

    Recent Achievement unlocked: Code Avenger Tier 4/6: You see dead program. A lot!
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  • User profile image
    elmer

    http://www.samsung.com/global/business/semiconductor/news-events/press-releases/detail?newsId=12281

    Samsung introduces 10nm process, leaving Apple few options for now, if it wants to have the latest technology.

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