Oct 22 AT 4:20 PM Dustin Earley 54 Comments

Samsung looking to move away from selling Apple their displays

android-vs-apple Image via: laihiu with Creative Commons

Samsung and Apple have an incredibly strange relationship. In the courtroom and in the marketplace, they’re bitter rivals. Constantly at each other’s throats. But when it comes to the manufacturing process, the two companies need each other. Apple relies on Samsung for several intergal components for its devices, like displays and processors, and makes up a huge part of Samsung’s manufacturing profits. In the past, both companies have been able to look past their relationship outside of the supply chain, but that appears to be over now.

According to a report out of the Korea Times today, starting next year Samsung will stop providing Apple with LCD displays. The process is already underway, with Samsung having moved from providing Apple with 15 million panels in the first half of 2012, to 3 million in the third quarter, to what is estimated to be nearly half that, 1.8 million, throughout the rest of the year.

Apparently, the discounts Samsung has provided Apple with in the past are no longer in Samsung’s best interest. Instead, Samsung will turn to both Samsung Electronics and Amazon, who has already increased orders, to fill the gap.

This is just the most recent move in Apple and Samsung’s attempts at decreasing dependency on each other. Apple has already begun to move away from Samsung for chip production. Fortunately, these kinds of decisions are not made overnight, so the affect they’ll have on consumers shouldn’t be noticeable.

Via: Android Authority

Source: Korea Times

Dustin Earley: Tech enthusiast; avid gamer; all around jolly guy.

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  • h0ruza

    I guess kissing and making up is out of the question?

    This war just keeps dragging on :-\

    • NeoJesus

      What if Google and Adobe pulled all their apps from IOS and Mac? It might be hard the first few years but Apple has discovered that it’s not easy building amazing apps like Google Maps & Adobe Creative Suite overnight.

      Apple would be done for if Google and Adobe had the balls to do this.

      • Eric Mendes

        Wouldn’t make much sense for Google to pull support for iOS and OS X. Google makes its money off of ad revenue. The more places for the ads, the better. Oh, and don’t forget the more they know about you, the better they can target you and more money they’ll receive from their ads.

        • mygain

          Yes but…

          If you just consider this for a second.. Apple’s devices would suck without Adobe’s and Google’s services and a large portion of their customers (ie not fanboys) would switch to different platforms. Google would still get those customers on their new platform, so they can still keep selling you their lovely ads. Yumm!

          A man can dream, right?

          • Ben

            I don’t see why adobe was dragged into this discussion but they would never shoot them selves in the foot like that. Most professionals who use their creative suite do it on macs. They would probably cut a huge portion of their income…

            Now onto iOS. I have an iPhone. I don’t have a single adobe app on my phone and don’t know anyone who does so I don’t know what you are talking about here. As for google. The only google app I have on my iPhone is YouTube and my email is setup with gmail (email is easily switched to another provider). So there is really no logic behind your claims here.

            To the issue of apple divorcing Samsung and Samsung deciding to pull the final plug. This IS a bad thing for both parties. For Samsung it loses income obviously. For apple it loses a quality manufacture. It has been reported that the new Mac book pro retina that have Samsung display work great and those with lg display have issues. The same thing goes for laptops with Samsung ssd, they have shown better results than the other suppliers. So in the end, because of this play ground scuff, apple laptops will have less quiltiy parts. With one of apples big selling points being premium quiltiy, that’s not a very good move.

      • zerosix

        And there is no reason for Adobe to stop supporting Apple.

        I’m glad, that Samsung is moving away from Apple. First of all, because Apple is like a jealous kid, who just goes to mom and complains when somebody takes his toys, but always takes other kids’ toys. Secondly, I think, Apple needs problems and troubles to start making great products again.

      • veracu

        The Samsung screens don’t leave ghost images on the retina mbp which I own. But the lg screens ghost images all day. I think it’d hurt apple a bit. What I’m looking forward to in the coming years is to see how Google and Motorola develop and grow together!

    • Hom0ncruse

      final nail in the coffin for samsung

      • cb2000a

        Ignorance is bliss…Samsung will do fine without Apple. They make better phones and fantastic TV’s (among other things).

        • MyMilan

          That’s what I used to think. You obviously never bought a samslum TV. I bought their top of the line TV and it lasted for only 6 months, then it broke. Had to find someone to fix it under warranty. Four months later it broke AGAIN. It’s out of warranty so now it sits an expensive over hyped paper weight. I learned my lesson the hard way so no more samslum TV’s in this house. When you pay thousands of dollars for a companies best product (any company) and it only lasts a few months, you think twice before you support that company ever again.

          • dbest180

            What warranty only lasts for ten months. Your story has holes just like your logic.

  • http://about.me/LuisOTorres taz88ny

    Seems like there is no difference between the screen produced by Samsung and the ones produced by other companies. Smart move by Apple, I just hope Samsung can make up the difference in orders.

    • vegiisan

      Did you even read the article? Samsung has decided to stop providing the panels as it’s not in their best interests, it was not apple that decided this. Considering Samsung is the only company large enough to fulfill large orders and discount the hardware in the process, this isn’t a smart situation for apple at all. Experts are constantly pointing out that current and next Gen panels from Samsung are industry leading so have fun with your second rate led/lcds smart man. :-)

    • Nate B.

      I honestly don’t think people read anymore smh

    • Bpear96

      Reading the title(properly) alone would have told you differently. (Keywords “Samsung looking to”, not Apple.)

  • LG Nexus

    I just wish they can stop this rivalry nonsense like little children and just do their thing despite being competition.

  • Raptors_Lecture_To_DumboAppleHaters_Salivating_On_Samsung

    Let me lecture kindergarden here with simple estimations.

    If believe iSuppli bill-of-matrials for iPad3, Samsung privides Apple with $200-250 worth of materials from screen to processor. Apple sells iPad for $500 of which it pays every other expenses from software to boxes. leaving Apple with around $100 margin. Bottom line is: Samsung gets $250, Apple $100. So which logo should shine on iPad3 — Samsung or bitten fruit?

    • vforvortex

      There are many flaws in your explanation. but to start of, the cost of display and touch screen is about $100.
      (source: http://allthingsd.com/20120824/a-peek-at-the-parts-and-profits-inside-samsungs-galaxy-note-tablet/)

      • Raptor

        Display+TS=$127
        Processor $23
        Flash $16
        RAM $13
        Battery $32
        ==============
        More then $200 all Samsung, excluding partially RAM which is also Hynix

        Due to high price for the retina display and absence of other suppliers Apple makes very small margin on wifi only 16GB version, getting more on 32/64 ones. IPad1 and iPad2 also had small margin 1/3-1/4 but still much larger then for iPad3

    • agudanna

      Everyone here is mixing profits with income.

      Samsung selling parts for $250 to Apple means the cost of manufacturing those parts will be close to $230. Profit per iPad should be around $20 for Samsung vs $100 for Apple according to your calculations.

      • Raptor

        True, but who said you that profit margin on display or flash for example will be 20/250 <10% and not say 50, 75 or even 90% since Samsung manufacturing everything for it by itself ?

  • guet

    You are retard if you think Samsung makes $250 for all the supplies in iPad and Apple making $100..

    Apple has a huge buying power, and they demand crazy price cut with any vendor they select..

    Do you honestly believe Apple makes $100 only while rest of the vendors make a huge profit as you stated?

  • aranea

    I’ve wondering why Samsung hasn’t stopped providing apple the screen and chips anyway. Or at least limit them. It would have stopped apple from trying to scare them away.

    • thel0nerang3r

      They couldn’t it or Samsung would be breaking their contract. They have to wait until the current contract expires. Then they can either negotiate higher prices or say “no thank you”. Until then, Samsung has to provide the parts or face penalties… pretty much standard contract.

  • w00x

    Too late. On the other hand, if Google follows Samsung’s example, things will get messy for Apple pretty fast. Apple just proved that themselves by removing Maps and YouTube. But what would happen if Google removes Maps, YouTube and Gmail from iOS willingly and not create separate applications in the AppStore?

    This isn’t going to happen because Google has a lot of revenue flowing from ADs in those application but hey.. it OK to dream, right?

  • Tangent

    I read another article today that had a slightly different tone, indicating that Apple was deciding to move away from using Samsung as a supplier… I’m kind of curious to know which way it actually is. Did Samsung decide to stop selling to Apple, or did Apple decide to stop buying from Samsung?

    • MyMilan

      It doesn’t really matter because in the end this will severely hurt samslum and help Apple. The rest of us can make some genetically modified popcorn and watch the show.

  • pjamies

    If you want to beat Apple at its own game, you better have a better product and none of their patents!! It’s that simple…
    Oh ya.. and Advertise the hell out of your product. Make it look fun and easy to use!
    Apples latest ad is for their version on the panoramic picture mode. They make it look like they invented the app, which they didn’t, and they make it look fun to use, which is what I hope Google and the rest of the Android manufactures do, which they don’t.
    It’s one thing to put Apple down, but not to focus on what your phone can really do is a loss of advertising money. People buy phones based on usability and convenience. (Yes, Apple isheep do it for other reasons also.. mainly because they are gullible and seem to think they need the latest iphone product even if it is basically the same product as last years!), but I digress ..
    Google and its phone manufactures have to start coming out with smarter advertisements, that actually show intelligent uses for their phones in action. Make it simple and fun to watch.
    I have seen lots of Google advertisements, and they are capable of very fun and easy to understand descriptions of different products that they produce. Why can Google not use this technique/format to run all of their Android advertisements? I am sure that their manufactures would love to conform to 1 type of advertising model to sell their phones and special phone features. Apple advertisements are all based on the same type of criteria/model. You can always tell when an Apple ad is playing as they have very similar styles, Music and content format.
    It does not have to be Google that hosts these advertisements, only that the different manufactures use the same model/format to show the product and its special features. This way you know it is a android product, but with maybe a Samsung/HTC/Motorola/LG .. twist..
    Google and it’s manufactures could crush Apple at their own game (iPhone) if they just come together and work to 1 common goal. Make better products without Apple patents, and create a better advertising model.

    • dbest180

      As an Android fanboy, every time I see an Apple ad I want an Apple product. They are masters at marketing. So curious that All Android OEMs follow or try to top Apple in all departments except advertising

      • wesley

        agree the s3 ad with beckham says sod all about what’s great about the phone. the one samsung did to demonstrate nfc and the one mocking apple fanboys were far better. you’re right about apple ads though even they are a bit dry now so its nice to see the new ipod advert which is more stimulating. the best apple ads were the ipod silhouettes.

        then apple make out others are copying them but the truth is they’ve also copied android features such as the notification bar. its kinda transparent to sue samsung over the galaxy tab and not this chinese manufacturer over the iphone 5 clone.

    • Tangent

      “you better have a better product and none of their patents!! It’s that simple…”

      That gets more complicated when your rival starts getting patents granted for things that are obvious, have prior art, and are pretty close to a requirement for that type of device… It seems like the only way to sell a smartphone that doesn’t step on any of Apple’s patents is to introduce one that’s shaped like a disc and that launches apps (with icons shaped like triangles) when you lick them.

  • redraider133

    I figured this would happen sometime. I mean why continue providing materials to your rival when your own phones are doing so well and can focus more on producing screens and the like for their own phones. I am sure samsung will do fine and will no longer have to sell their parts at such cheap prices to others as they had to with apple.

  • BigCiX

    So who are they going to turn to? Sharp or LG?

    • Bob,Boulder,Colorado

      LG and Sharp are perpetual loss making machines. So maybe there is no money anymore in display panel business. Basically no profits in supplying display panel to a greedy corporation like Apple.

    • MyMilan

      Sharp and LG are probably celebrating about this. They could both use Apples money and will help their bottom line.

  • Ardrid

    Can you really blame Samsung for this move? Between the litigation and the increased competition, it doesn’t make financial sense to continue to provide Apple with panels that will be directly used against Samsung Electronics. I was initially worried about Samsung’s bottom-line when I read the headline, but if they have Amazon and Samsung Electronics to fill the void this seems like a win-win to me. Let Apple find someone else to supply those “Retina” panels.

  • inviolable

    So Apple has been moving away from Google, and now are moving away from Samsung. I don’t have to point out the irony here, but I do hope that in regards to that missing chunk in Apple’s logo, these events provide a little comical foreshadowing.

  • lxgeorge

    Love the article, but *effect* ;)

  • dz1

    Good. Apple will suffer more component shortages, as happened with iphone 5, and will be forced to pay higher prices for components. These higher prices will be passed onto the sheep who will increasingly look for alternatives. It’s all slowly starting to unravel now for apple. Suing your biggest component supplier may turn out to be one of the stupidest business decisions ever made by any company.

  • guest

    Sadly, with the death of Steve Jobs………

  • B

    So I found out Samsung has a patent on the retina displays…once there contracts with ape are up I say they use those displays in Samsung phones to give apple a big F U

  • guest

    “Samsung Display was the top panel supplier to Apple as of the end of the first six months of this year, shipping over 15 million LCDs, followed by its biggest rival LG Display with 12.5 million and Japan’s Sharp with 2.8 million, the Korea Times said, citing market research firm DisplaySearch.”

    Do you guys think LG + Sharp combined have the capacity to meet those 15m LCDs that Samsung is currently supplying?

    I am guessing Apple supply and their products are largely affected as part of this outcome… unless there is another manufacturer who can fill this gap…

  • BigCiX

    LG IPS screens are amazing.

  • muii

    And the new manufacturer/partner shoudl now he can be stabbed in the back by Apple. Hey partner, sue me !

  • android.whipped

    Don’t bite the hand that feeds you…

  • NexusNYC

    In the end the only person to be hurt is the consumer. Any price increase will be passed on to us to pay. No more discounts on LCD panels? CHARGE MORE. Its the american way. Why not make the LCDs here!?!? Robots dont cost that much to feed,

  • Derek

    Samsung begged Apple to keep using their displays. Apple said no. Apple is ditching everything about samsung. Samsung used to design the A* chips, now they are solely a chip foundry with Apple designing everything in house.

  • Nathan D.

    Stick it to them Samsung >:-)

  • Joel

    Hows the old saying go?

    “Dont bite the hand that feeds you”….you’ll begin to starve.

    Im behind Sam 110% – Apple has done waaay too much biting lately.

  • MyMilan

    This is nothing more than a marketing move on samslums part so that they can charge Apple more money for their parts. It’s a bad move on samslums part. Apple makes them a ton of revenue. Samslum will soon learn that they aren’t the only player in the game as other companies fill the void. Apple could care less who they give their much valued money to for parts. In the end the consumer will not even notice that Apple switched manufactures, and samslum will loose lots of needed money, shooting themselves in the foot. This is the last thing that samslum should have done.

  • J Liu

    Says who it is Samsung that dumps Apple and not the other way around? 300+PPI is what Samsung’s technology can do today. Sharp has technology that can do 400+PPI. So the breakup hurts Samsung more than Apple. On the other hand, the less Apple dominates the supply chain, the better for users who do not want Apple dictating everything and can have choice of whoever making the best hardware. Software? Android is good enough and evolves faster.

  • freddiefan

    No question that apple is winning the marketing war.

  • sbala

    A correct decision made by sammy

  • MohammadJins

    This is a strange relationship but no different from China/US government vs. China/US business. I have a Samsung Galaxy Tab 8.9, and I use it nearly every day for my graphic design firm here in NY because of its great screen. Also, the power of ICS combined with the speeds of AT&T’s 4G LTE network make this device a force to be reckoned with.