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Samsung COO met with Tim Cook to discuss supplying 'better parts' through 2014

post #1 of 42
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After attending a memorial service in honor of the late Steve Jobs, Samsung's chief operating officer met with Apple CEO Tim Cook to discuss supplying the company with "even better parts" in 2013 and 2014, after its current contract ends next year.

Lee Jae-Yong, heir apparent to the family-owned Samsung Electronics empire, met with Cook for more than two hours after attending Jobs' memorial service on Sunday, The Korea Herald reports.

Arriving back in Seoul earlier this week, Lee told reporters that, despite the ongoing legal disagreement between the two companies, Samsung will continue to sell parts to Apple until 2012. On Monday, it was reported that Samsung will supply a next-generation quad-core "A6" processor to Apple next year.

Lee went on to suggest that he had talked with Cook how his company's supplier relationship with Apple will continue on after next year.

"For the 2013-2014 period, we discussed how best to supply even better parts," he said. Lee also mentioned that he and Cook had talked about past challenges and how to promote good relations between their companies in the future, the report noted.

The executive declined to comment on whether the meeting could lead to a resolution of the companies' legal dispute, saying only that his visit "was to attend the memorial service."

Apple was Samsung's second-largest client last year, behind only Sony, and is expected to take the top spot this year with an estimated $7.8 billion in component purchases.

As tensions have mounted between Apple and Samsung, rumors have swirled that Taiwan Semiconductor Manufacturing Co. would take over for Samsung in producing Apple's custom chips.
"There is a need to compete in a fair manner for the benefit of the consumer, and this stance existed in the past, is taking place now and will occur in the future," Lee said. According to him, the company is currently deciding whether to expand its legal actions against Apple or to hold off.

Apple first sued Samsung in April, alleging that the company had copied the look and feel of its iPhone and iPad. At present, ongoing lawsuits between the two companies number in the twenties and span more than a dozen countries.

Last month, the head of global marketing at Samsung said the South Korean electronics giant would be "more aggressive" in pursuing its rights after having held back because Apple was a client.

"We've been quite respectful and also passive in a way," the executive reportedly said. "However, we shouldn't be... anymore."

For its part, Samsung does appear to be taking steps to curb potential infringement of Apple's intellectual property. The company has indicated that, for the just-announced Galaxy Nexus smartphone, great efforts were taken to ensure that the device does not violate any known Apple patents.

"Now we will avoid everything we can and take patents very seriously," said Samsung's mobile president Shin Jong-kyun earlier this week.
post #2 of 42
Quote:
Originally Posted by AppleInsider View Post

"Now we will avoid everything we can and take patents very seriously," said Samsung's mobile president Shin Jong-kyun earlier this week.

This implies that it was not the case in the past.
post #3 of 42
Quote:
Originally Posted by AppleInsider View Post

"Now we will avoid everything we can and take patents very seriously,"

Yeah, NOW.

Quote:
Originally Posted by See Flat View Post

This implies that it was not the case in the past.

I thought more BLATANTLY SCREAMS.
post #4 of 42
Even assuming that this meeting took place, and that it went along the lines that Lee suggested, was there a point to his blabbering? Similarly, what was this Shin guy thinking when he shot his mouth off? Didn't he realize that this makes the company look really silly, and creates potential legal jeopardy?

Samsung senior execs would be generally well-advised to keep their mouths shut. They need better lawyers -- for starters, ones that can actually tell them to do so.
post #5 of 42
Quote:
Originally Posted by anantksundaram View Post

They need better lawyers -- for starters, ones that can actually tell them to do so.

Well, their lawyers can't tell their own devices from Apple's, so I'm not sure they should do much telling for a while.
post #6 of 42
Apples volumes are pretty huge especially considering they are using bleeding edge technology in A5. They are most likely talking about technology beyond 28nm which is what I expect the A6 to arrive on. My understand is that 28nm is ready to roll at Samsung.

A quad core running at 1.5 GHz will make one excellent iPad

So maybe Apple continues to use Samsung as a supplier, but I'm pretty convinced they want a bigger supplier base for these processors. Look what is happening to HArd Disk manufacturing due to one flood. Buying every thing from Samsung is just exposing ones self to a single point failure in the supply chain. I would think that it would simply be prudent to have those chips coming from two different factories.
post #7 of 42
Quote:
Originally Posted by anantksundaram View Post

Even assuming that this meeting took place, and that it went along the lines that Lee suggested, was there a point to his blabbering? Similarly, what was this Shin guy thinking when he shot his mouth off? Didn't he realize that this makes the company look really silly, and creates potential legal jeopardy?

Samsung senior execs would be generally well-advised to keep their mouths shut. They need better lawyers -- for starters, ones that can actually tell them to do so.

Was it in Korean? I am just saying, with the crazy translations floating around he could have just said that his bunions needed to rest from walking too much around Apple campus.

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post #8 of 42
He actually said that patents are very smooth.
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post #9 of 42
Samsung decides that having Apple as a customer brings in money and makes samsung rich. What a concept. Samsung pay royalties for all devices that infringe on Apple design. Royalty percentage of every device sold now and in the future. Apple ends up with 100 billion dollars. Thats 100,000,000,000.00. Can you say that really fast 10 times.
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post #10 of 42
Quote:
Originally Posted by wizard69 View Post

A quad core running at 1.5 GHz will make one excellent iPad.

I was thinking more like a quad-core 1GHz Cortex-A8-based A6 for next year's iPad 3.
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post #11 of 42
Quote:
Originally Posted by wizard69 View Post

A
A quad core running at 1.5 GHz will make one excellent iPad

I would be very happy to see/own this! Even more so if there were apps built to utilize it!
post #12 of 42
I can't imagine Samsung Electronics having fabrication technology that can't be matched by Intel, Global Foundries or TSMC.

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post #13 of 42
Quote:
Originally Posted by solipsism View Post

I was thinking more like a quad-core 1GHz Cortex-A8-based A6 for next year's iPad 3.

Now, if we can get a memory technology into the iPad/iPhone to replace both the RAM and Flash memory in affordable, tens of GB capacities, these systems would be unstoppable, unapproachable and even way cooler!

All the best.
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post #14 of 42
Seems that Samsung has more to gain keeping Apple as a customer than selling their own iPhone knock-offs. Of course if they don't violate any of Apple's patents (or pay a license fee) they are welcome to market their own devices. Since most of the 'secret sauce' is really software, I think Apple has a better shot going after Google.
post #15 of 42
Next to Japan, which country in Asia is most trusted by the US as a long-term partner?

Samsung is important to Apple, it would not surprise me at all for Tim to work hard at smoothing the relationship between the two companies. Further, I'll bet that it is in Tim's nature to do so.
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post #16 of 42
Quote:
Originally Posted by IQatEdo View Post

Next to Japan, which country in Asia is most trusted by the US as a long-term partner?

Samsung is important to Apple, it would not surprise me at all for Tim to work hard at smoothing the relationship between the two companies. Further, I'll bet that it is in Tim's nature to do so.

I would have cut off Samsung from the supply-chain. Samsung used its insider knowledge as an Apple supplier to copy Apple products.

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post #17 of 42
Hearing that Samsung supplies Sony is kind of weird. I guess it says something about Samsung.

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post #18 of 42
Quote:
Originally Posted by IQatEdo View Post

Next to Japan, which country in Asia is most trusted by the US as a long-term partner.

Taiwan.
post #19 of 42
Quote:
Originally Posted by Mac.World View Post

Taiwan.

Sure, Taiwan ia an ally, however, no one can be certain that it can remain a long-term partner. \
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post #20 of 42
Apple and Tim Cook got to know that the A series processors like the A5 are the single most important component for Apple, besides the Intel chips. They should know about the risk of using a single supplier like Samsung. Plus the geopolitical risks. After the earthquake in Japan, they should be aware of Black Swan supply disruptions.

Apple has to use multiple suppliers with geographic diversification to reduce risk... even if costs more. Why not Intel? IBM? They are not going to double cross Apple.
post #21 of 42
What I don't get is that Apple makes custom chips, right? Not totally different, but still custom. But Samsung, a competitor, produces it. So certainly Samsung will rip off their custom designs? Better for Apple to produce their chips elsewhere.
post #22 of 42
Quote:
Originally Posted by AjitMD View Post

Why not Intel? IBM? They are not going to double cross Apple.

Intel are not a fab for hire. They make their margins by selling products they design from the bottom up.

Apple do need to diversify though, IBM is a good shout as would TSMC or Global
post #23 of 42
Quote:
Originally Posted by See Flat View Post

This implies that it was not the case in the past.

Strange diction - English is not his first language. Don't read too much into it.
post #24 of 42
Quote:
Originally Posted by Aizmov View Post

I can't imagine Samsung Electronics having fabrication technology that can't be matched by Intel, Global Foundries or TSMC.

Believe it. Apple went hat in hand back to Samsung and begged them to produce the A6. If Apple had a choice, why didn't they go to Intel, Global Foundries or TSMC?
post #25 of 42
Quote:
Originally Posted by karmadave View Post

Seems that Samsung has more to gain keeping Apple as a customer than selling their own iPhone knock-offs.


You don't have nearly enough information to make that conclusion.
post #26 of 42
Quote:
Originally Posted by AjitMD View Post

Apple and Tim Cook got to know that the A series processors like the A5 are the single most important component for Apple, besides the Intel chips. They should know about the risk of using a single supplier like Samsung. Plus the geopolitical risks. After the earthquake in Japan, they should be aware of Black Swan supply disruptions.

Apple has to use multiple suppliers with geographic diversification to reduce risk... even if costs more. Why not Intel? IBM? They are not going to double cross Apple.


Apple and Tim Cook obviously know that. Apple and Tim Cook likely tried to get other chip makers to do business with them. Apple and Tim Cook seemingly were turned down by other chip makers, and were forced to go with Samsung and to use a single supplier.

My impression is that Apple offers deals that few companies are inclined to accept. Their deal with Sprint was way over the top. Samsung seems to not care whether Apple remains a customer or not. Apple was not successful in getting any other chip maker to deal with them on the A6.

But nobody knows what is really going on - all we have to go on is second hand tea leaf reading by the media.
post #27 of 42
Quote:
Originally Posted by ConradJoe View Post

Believe it. Apple went hat in hand back to Samsung and begged them to produce the A6. If Apple had a choice, why didn't they go to Intel, Global Foundries or TSMC?

What on earth makes you think Apple begged Samsung for anything? You're always clamoring for evidence when people make claims here and yet you throw out at least as much inflammatory excrement as the worst of them without a shred of support.
post #28 of 42
Quote:
Originally Posted by Aizmov View Post

I can't imagine Samsung Electronics having fabrication technology that can't be matched by Intel, Global Foundries or TSMC.

but a capacity one. I think Samsung has much greater capacity for production than any of those three (currently) individually. If the others can demonstrate to Apple that they can produce the quality that Apple demands its possible. Intel in particular though is trying to drive its own Atom technology in competition with the ARM architecture, and their fab is oriented to doing that - so Intel wouldn't be interested in supporting fab for ARM. The other two can.
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post #29 of 42
Quote:
Originally Posted by ConradJoe View Post

You don't have nearly enough information to make that conclusion.

Okay, so all we have to do is look at revenue that comes from sales of their crap hardware versus revenue from their manufacturing deals with Apple.
post #30 of 42
Quote:
Originally Posted by AppleInsider View Post

"For the 2013-2014 period, we discussed how best to supply even better parts," he said.

Why in the world would anyone think that "we will have better components in 2-3 years than we have today" is newsworthy in this industry?
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post #31 of 42
Quote:
Originally Posted by ConradJoe View Post

Believe it. Apple went hat in hand back to Samsung and begged them to produce the A6. If Apple had a choice, why didn't they go to Intel, Global Foundries or TSMC?

Intel? To produce ARM-based processors? Are you serious?
post #32 of 42
Quote:
Originally Posted by stelligent View Post

Intel? To produce ARM-based processors? Are you serious?

He's probably confusing it with this.
post #33 of 42
Quote:
Originally Posted by stelligent View Post

Intel? To produce ARM-based processors? Are you serious?

Actually, Intel was asked whether they would make ARM processors. Their response was pretty wishy-washy:
http://www.reuters.com/article/2011/...74P43W20110526
Quote:
He said Intel would be happy to produce chip cores based on its own architecture for other companies but that allowing rival architectures to be manufactured in its plants would be a tough decision.

"If Apple or Sony came to us and said 'I want to do a product that involves your IA (Intel architecture) core and put some of my IP around it', I wouldn't blink. That would be fantastic business for us."

"Then you get into the middle ground of 'I don't want it to be a IA core, I want it to be my own custom-designed core,' and then you are only getting the manufacturing margin, (and) that would be a much more in-depth discussion and analysis."

They didn't say that they wouldn't do it - only that it would take an in-depth discussion an analysis.

I doubt if they'd even consider it for anyone buying less than 10s of millions of custom chips per year, but Apple is in the ballpark that they've already had discussions about what to do if Apple did approach them.

Clearly, Intel is still trying to convince Apple that Atom (or whatever follows Atom) makes the most sense. If they ever get the performance/watt to the right level, I don't doubt that Apple would at least consider it. That hasn't happened yet. I suspect that Intel would only consider acting as foundry for Apple if they reach the conclusion that they're not likely to reach ARM's performance/watt any time soon.
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post #34 of 42
Much of what I have read about Samsung and Apple recently leads me to believe that Samsung's legal offensive has become little more than a face-saving Kabuki.

The practical part is to use their legal dance to buy time while they change their products to avoid being in violation of Apple's property, and making nice-nice with Apple on the supplier front.
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post #35 of 42
Quote:
Originally Posted by GregInPrague View Post

What on earth makes you think Apple begged Samsung for anything? You're always clamoring for evidence when people make claims here and yet you throw out at least as much inflammatory excrement as the worst of them without a shred of support.


Samsung has been shitting all over Apple now for a long time. Apple has not been successful in getting any other chip maker to fabricate the A6.

2+2=?

All we can do is guess. None of us have any reliable information, but all of us can add up 2 and 2.
post #36 of 42
Quote:
Originally Posted by Tallest Skil View Post

Okay, so all we have to do is look at revenue that comes from sales of their crap hardware versus revenue from their manufacturing deals with Apple.

Revenue?

Isn't profit important?

Tell ya what, compare the profits from the two activities. Then compare the relative profitability of Apple convincing somebody else to make chips for them (no success so far for the a6...).

Then get back to me, and I might conclude that you have enough information to justify the original wild-assed guess.

But until then, know that Samsung is shitting all over Apple and Apple just signed up to hand over Billions more dollars to Samsung.
post #37 of 42
Quote:
Originally Posted by ConradJoe View Post

2+2=?

4?

Anyway, with the rest of your post. Samsung isn't shitting all over Apple at all, for what they do' it's quite the opposite.
post #38 of 42
Quote:
Originally Posted by stelligent View Post

Intel? To produce ARM-based processors? Are you serious?

No.

I was pointing out to the OP that Apple did NOT have the choice to go to Intel. Indeed, they seemingly had no ability to choose any other chip maker, and were forced to accept Samsung.

That seems to me to be the most likely explanation for Apple continuing to supply Samsung with profits, despite Samsung mistreating Apple so badly.
post #39 of 42
Quote:
Originally Posted by ConradJoe View Post

Revenue?

Isn't profit important?

Tell ya what, compare the profits from the two activities. Then compare the relative profitability of Apple convincing somebody else to make chips for them (no success so far for the a6...).

Then get back to me, and I might conclude that you have enough information to justify the original wild-assed guess.

But until then, know that Samsung is shitting all over Apple and Apple just signed up to hand over Billions more dollars to Samsung.

It really amazes me how you are able to predict the future with such certainty.

First, there is no public knowledge that there will even be an A6.
Second, even if there is, there is no evidence that Samsung will produce it.
Finally, even if Samsung produces it, that doesn't mean that Apple isn't already working with someone else to produce the A7 (it takes years to qualify a CPU supplier)

Since you're so good at knowing things that are well into the future, would you please pick my PowerBall numbers for me?
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post #40 of 42
Quote:
Originally Posted by jragosta View Post

It really amazes me how you are able to predict the future with such certainty.

First, there is no public knowledge that there will even be an A6.
Second, even if there is, there is no evidence that Samsung will produce it.



Samsung to supply quad-core A6 CPU to Apple
http://www.appleinsider.com/articles...le_report.html

Nice try.

You WERE trying, weren't you?
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