Apple plans to reduce Samsung use

While the tension on the Apple and Samsung relationship continues to build, Apple seem to be beginning to make a move that will see the company attempting to supply their components from elsewhere.

Digitimes has reported that Apple has increased spending on memory in Japan. According to sources the company plans to start purchasing their DRAM from Elpida and their NAND flash memory from Toshiba.  Currently, Samsung owns a large chunk of the market share in both NAND flash memory with 30% and the DRAM market with 40% with both markets likely to take a hit.

A large portion of the iPhone and iPad’s components are currently manufactured by Samsung, which has led to a friendly relationship for the most part. More recently, Samsung have been producing their own smartphones, with the majority running the Google Android operating system. Apple believe that Samsung are violating numerous patents that they own. These days, when Samsung or Apple are mentioned, the majority of the tech world immediately thinks of the outstanding patent war between the companies which has led to the Samsung Galaxy tablet being blocked in various countries.

BGR reported earlier this year that Apple had plans to purchase approximately $7.8billion in components from the company but with the patent wars continuing, relations between the two are in danger.

Additionally, some rumors speculate that Apple plans to remove Samsung from its mailing list for CPU’s with suggestions that they could take their business to the Taiwan Semiconductor Manufacturing Company (TSMC). With Samsung being the largest component manufacturer for Apple, the company has a lot of work ahead of them if they want to phase Samsung supplies out completely.

Image credit: t3

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Samsung itself should end all hardware deals on an instant basis, and Apple's lawsuits will drop in a jiffy.

We can easily conclude that both Samsung and Apple equally need each other. $ 7.8 billion is a big figure to lose. However, moving off production of such a large proportion isn't easy and takes a long while to build.

Rahul Mulchandani said,
We can easily conclude that both Samsung and Apple equally need each other. $ 7.8 billion is a big figure to lose. However, moving off production of such a large proportion isn't easy and takes a long while to build.

Right!1 Apple will eventually drop sammie, but it wont happen overnight. First that have to find a supplier that can meet the demand needed. Then they have to wait for that company to get up in production numbers. This will take time. Much of which Apple has not much of. Samsung will likely still be producing parts for the next model. after that Apple will have to wing it. Which means the quality of the device could go down.

Now apple will truly be putting crap inside fancy cases.

KingCrimson said,
Sammy can't afford to lose Apple's business. But Apple can tell Sammy to go to hell!

Boy, how dumb can you be? Samsung is 4 times the company Apple is. Samsung doesn't need Apple's business. In fact, Sammie can use the parts in their OWN phones and sell MORE of them.

Samsung supplies 30% of the components in iPhones and as such they have access to the full specifications of the devices and probably have beta versions to test , and copy for their own smartphones.

alexalex said,
Samsung supplies 30% of the components in iPhones and as such they have access to the full specifications of the devices and probably have beta versions to test , and copy for their own smartphones.

Dumbest comment I've ever seen on Neowin. Jesus...

alexalex said,
Samsung supplies 30% of the components in iPhones and as such they have access to the full specifications of the devices and probably have beta versions to test , and copy for their own smartphones.
That same information they could get by having an employee go out an buy a phone and reverse engineer it and do the same thing.

I dont think Samsung product minic Apple products except in quality. Apple is scared bec Samsung has the jack and capability to not only compete against Apple in their game, but also beat them. There are LOTS of products sold today that mimic Apple products on some level. But because none of them have the potential to compete, Apple isn't saying anything.

Oh but when it comes to Samsung or HTC, which in both cases are having product sales that could beat Apple, Apple is suing to stop them because they cant win any other way.

Apple sucks!!!!

I see Samsung memory chips for Smart on my hard drives I know I'm in good hands. Everyone else sucks well maybe not Hynix (sp) but most everyone else.

Let's also not forget that Samsung makes everything from TV's to refrigerators to the apparatus used to insert demonic souls into those creepy ventriloquist dummies. That and they employee nearly the entire population of South Korea (including imaginary friends).

Samsung will be just fine with or without Apple.

You drop using Samsung you'll have a drop in quality. Apples loss and at this stage don't think Samsung or anyone could care less. It just means more capacity for their own devices.

What this doesn't tell you is how much of this is motivated by Samsung? The article implies that this is all Apple. Maybe Samsung is cutting supplies as contracts expire to be able to build their own phones. I am sure there are two sides to this story.

Rooster69 said,
What this doesn't tell you is how much of this is motivated by Samsung? The article implies that this is all Apple. Maybe Samsung is cutting supplies as contracts expire to be able to build their own phones. I am sure there are two sides to this story.

you really don't think samsung wants all that business? that they are willing to give up that much money? all their quarells aside, it would be a stupid decision for samsung themselves to tell apple to eff off.

Apple demanded intel to make more power efficient/smaller chips and if they didn't, they would switch suppliers. Guess what Intel did? Make more power efficient and smaller chips because apple told them to.

Apple has that much power and they are able to tell the biggest players what to do.

rajputwarrior said,

you really don't think samsung wants all that business? that they are willing to give up that much money? all their quarells aside, it would be a stupid decision for samsung themselves to tell apple to eff off.

Apple demanded intel to make more power efficient/smaller chips and if they didn't, they would switch suppliers. Guess what Intel did? Make more power efficient and smaller chips because apple told them to.

Apple has that much power and they are able to tell the biggest players what to do.

Actually i do. If Samsung feels they can make far more money off of their phones then selling memory to Apple then it is quite easy to make that decision. I know it is unfathomable to think a company could tell Apple to go away but it is very possible.

Rooster69 said,

Actually i do. If Samsung feels they can make far more money off of their phones then selling memory to Apple then it is quite easy to make that decision. I know it is unfathomable to think a company could tell Apple to go away but it is very possible.

It's more than just memory that Samsung provides for Apple...

shockz said,

It's more than just memory that Samsung provides for Apple...

That's why I think there is more to the story. If Apple was really trying to hose Samsung they would be searching for all parts not just the memory. This memory may be the one thing the new Samsung phones and iOS devices share.

Rooster69 said,

Actually i do. If Samsung feels they can make far more money off of their phones then selling memory to Apple then it is quite easy to make that decision. I know it is unfathomable to think a company could tell Apple to go away but it is very possible.

As popular as Samsung's devices have become, they still need Apple's business. And their shareholders would foolish to be ok with this. $7.8 billion going to other companies can't sit well with investors unless Samsung is making up that loss with sales of its own devices. And even if (which I very strongly doubt) that is possible, then Samsung would be growing and have the production capability to still be able to supply for Apple. That would mean even more revenue. The key here is that Samsung isn't unique in the components it provides to Apple.

asdavis10 said,

As popular as Samsung's devices have become, they still need Apple's business. And their shareholders would foolish to be ok with this. $7.8 billion going to other companies can't sit well with investors unless Samsung is making up that loss with sales of its own devices. And even if (which I very strongly doubt) that is possible, then Samsung would be growing and have the production capability to still be able to supply for Apple. That would mean even more revenue. The key here is that Samsung isn't unique in the components it provides to Apple.

You can not create production capacity over night and the 7.8 billion is all Apple contracts not just memory, of which Apple is only seeking part of it's requirement elsewhere which further reinforces the idea that Samsung is freeing up production capacity for it's own products.

rajputwarrior said,

you really don't think samsung wants all that business? that they are willing to give up that much money? all their quarells aside, it would be a stupid decision for samsung themselves to tell apple to eff off.

Apple demanded intel to make more power efficient/smaller chips and if they didn't, they would switch suppliers. Guess what Intel did? Make more power efficient and smaller chips because apple told them to.

Apple has that much power and they are able to tell the biggest players what to do.


Actually Intel did just fine before Apple decided to switch to their processors.

rajputwarrior said,

Apple demanded intel to make more power efficient/smaller chips and if they didn't, they would switch suppliers. Guess what Intel did? Make more power efficient and smaller chips because apple told them to.

Yeah, because Intel would only follow the natural evolution of a smaller, more power efficient chip because Apple told them to.

Enron said,

Yeah, because Intel would only follow the natural evolution of a smaller, more power efficient chip because Apple told them to.

The company in May announced a sharp revision in its product roadmap to lower the average power draw of its chips from a range of 35 watts to 40 watts to just 15 watts.

[Intel Ultrabook director Greg] Welch said Apple informed Intel that it better drastically slash its power consumption or would likely lose Apple's business. “It was a real wake-up call to us,” he said.

http://www.macrumors.com/2011/...ips-over-power-consumption/

I'd believe the reduction in processor power usage is related to Intel's Ultrabook design, not Apple's demands. Even if a threat, what are Apple going to do? Sulk and swap to ARM A5 processors? Good luck with that.

rajputwarrior said,

The company in May announced a sharp revision in its product roadmap to lower the average power draw of its chips from a range of 35 watts to 40 watts to just 15 watts.

[Intel Ultrabook director Greg] Welch said Apple informed Intel that it better drastically slash its power consumption or would likely lose Apple's business. “It was a real wake-up call to us,” he said.

http://www.macrumors.com/2011/...ips-over-power-consumption/


Let's see.....7.31%(Apple) market share vs 92.69%(everything else). I'd give Apple the finger.

Rooster69 said,
What this doesn't tell you is how much of this is motivated by Samsung? The article implies that this is all Apple. Maybe Samsung is cutting supplies as contracts expire to be able to build their own phones. I am sure there are two sides to this story.

Well duh? Apple is the one always suing Samsung? Right?! So who you think would want to break the relationship?! I mean, isnt that a given? Its like being married, whoever has the most problem in the relationship, is usually the one that leaves. Right?

In before some idiot says Samsung should just cut apple off, and in the process tank their own stocks, kill much if not all of their profits, and be in a legal breach of contract with Apple that could have them tied up in court for decades and cost an arm and a leg.

Luckily Samsung doesn't have to worry about their stocks 'tanking'.

Also, Samsung does not need Apple (although it does offer a nice profit). They are a very diversified company. Apple, on the other hand, loses quality in its sole breadwinner product by ditching Samsung.

Ryoken said,
In before some idiot says Samsung should just cut apple off, and in the process tank their own stocks, kill much if not all of their profits, and be in a legal breach of contract with Apple that could have them tied up in court for decades and cost an arm and a leg.

You are probably the most moronic person here. Samsung doesn't need Apple, it works the other way around. Hell, there wouldn't be no Apple if there were no idiots like You who keep buying that over priced ****.

Ryoken said,
In before some idiot says Samsung should just cut apple off, and in the process tank their own stocks, kill much if not all of their profits, and be in a legal breach of contract with Apple that could have them tied up in court for decades and cost an arm and a leg.

You must be delusional. Apple is like 2-5% of all Samsung profit.