Samsung value drops $10B as investors fear it being cut out of Apple supply chain - Page 2

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Originally Posted by Tallest Skil 

 

There were people who said that? I only remember the opposite…

I do recall people saying that apple should bow to samsungs wishes with the fantasy idea that samsung builds the iPad and iPhone lol.  Which is about as far from the truth as you can get.  But most of those were trolls lol.

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Originally Posted by aaarrrgggh 

Samsung makes significantly more profit from their mobile phone business than chips. If losing Apple's chip business messes with the economics, then maybe the strategy would work... But it is a stretch.

Not so much of a stretch as you might think.  If samsung were to loose apples almost 12 billion a year in purchases it would really hurt samsung and would be hard to recoup in the short term and maybe even the long term.

They are samsungs largest customer by far.  They don't just purchase chips from samsung, they purchase lcd's as well and a host of other components to memory too which this article is talking about and the a5x, a5 and a5 chips are built by samsung to apples custom specs.  There is a lot of things samsung would loose by loosing apples business not just chips.  Apple is the largest consumer of memory and custom chips in the world now too by the way.

sorry meant a 4 chip there as the third one.

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Originally Posted by NotRichard 
It's a plot. Another 10 billion drop in Samsung's value, and Apple can BUY the whole company, eliminating one of their fiercest competitors, and gaining the ability to manufacture their own processors and displays. 

1. Apple cannot buy all of Samsung.

2. Apple purchasing even their mobile division would be blocked by every government on the planet. Apple and Samsung together have a majority of the phone market (I forget the percentage), and as Apple would simply discontinue all Samsung phones, the monopolistic nature of the merger would stop it everywhere.

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Originally Posted by Mechanic 
If samsung were to loose apples almost 12 billion a year in purchases it would really hurt samsung and would be hard to recoup in the short term and maybe even the long term.

They have quite a few divisions. Television, mobile, printer, construction equipment… 

The best moves that Apple could do at this point is set themselves up so they contribute less to Google and Samsung's coffers in the future, Apple's only real competitors in any sense of the word. 

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Originally Posted by Bwinski 

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Poor, poor, poor Sammy... A minuscule $10 Billion Market cap loss... wwwwwhhhhhhhaaaaaaaaa...... Call me the smallest ambulance ever known to mankind.... So, do you think a $100 PER SHARE DROP in the price of Apple stock is more or less than $10 Billion?
Sniffle... Sniffle... Sniffle....

Umm basic math will tell you that a 100 dollar drop for apple would result in a huge lost well beyond 10 billion given their huge market cap as it is.  The last close was $546.08, a 100 dollar drop would equate to roughly 20% drop in stock price. That kind of drop generally occurs when something really really bad happens. If apple shares were to drop that much you'd likely expect to see sell offs in the entire market.

If apple shares dropped tomorrow about 6% like samsung shares did it'll be would be about a 30 billion or so lost in market cap.

Maybe this is from Digitimes, and so, not really credible.... but I think this is the general direction that Apple is moving towards. Samsung, Google, and Amazon are possibly the nearest competitors to Apple, and it makes zero sense for Apple to do anything that enriches their competitors. Samsung and Google gain from Apple in really big ways. Amazon, not so much.

From $12 Billion of component sales, Samsung should be making about a 10% margin or about $1.2B - and they will also benefit from the enhanced volumes they get because of Apple - for instance, Apple's enhanced volumes would likely lower costs for Samsung - both for their own component costs, as well as through increased margins when they sell to others.

Similarly, Google benefits from AdMob, Maps, Search, etc connected to Apple. Apple should be actively looking for ways to cut Google out of the equation, so that they can put a squeeze on Google.

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Originally Posted by Tulkas 

Cutting Samsung out of their supply chain (as much as possible) would be a much better tact that the lawsuits, IMO. Lawsuits drag on and are creating a negative public perception. Moving to alternative suppliers is just a business decision and will hit Samsung harder. Without overtly making it an issue in their supplier relationships, they could certainly use this to encourage more ethical behavior from Samsung with regard to aping Apple products.

Apple would have to be very cagey about such a move. Cutting a company out of your supply chain to punish them financially over a competing product sounds dangerously close to anticompetitive behavior. 

NOW, it's WORSE!!! It's Thursday and it's almost OR OVER  $ 100 BILLION. So, Samsung can go S*** in their hat...

Humor, my friend, humor. No, Apple PROBABLY couldn't buy the WHOLE company, but Samsung is supposedly getting out of the HD television market, and wouldn't that just fit into Apple's plans nicely to buy their entire production line at a reasonable (in corporate terms) price?

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Originally Posted by drblank 

Unfortunately, Samsung tried to come up with their own Operating System, but that failed.    Samsung should be split up whereby the component fabrication companies are not part of the same company.  As much as Apple does in business, they could buy up their own mfg companies.   IBM has their own chip fab to produce chips for a long time.  They, as far as I know, are still making chips for AMD.  I think they still might be making their own X86 Intel chips.  At least they used to do that.

 

The biggest problem with running your own chip fabrication plants is keeping up with the latest and greatest advancements in order to bring down the size of the transistors, or the when they come with a larger wafers.  It's something Apple could do, if they needed to, but they have to buy the right companies, and probably invest money to keep them up to date, and maybe sell some of their standard components to other companies if they have more yield than they use in their own products.  At least, they'll be able to have more control over their component supply.

I'd love to be privy to the conversations within Apple regarding which technologies to bring in-house, which technologies to invest heavily in (either by locking up a given manufacturers supply or partnering to build out capacity or both) and which technologies to treat as commodities on the open market.  In-house gives you complete control but comes with a lot of ongoing costs that you don't want to take on if you can get good results by allowing your manufacturing partners to shoulder some or all of the development and manufacturing costs, but then again you may not get the kind of exclusive deals or custom fabrication you'd want if you go that way.

Apple seems to have been pretty smart to date about how to spend their money and treading the line between control and cost,  but Samsung creates a sort of a wild card.  Apple is clearly going to move some chips around (as it were) that they wouldn't have to  if Samsung weren't such a competitor.  They're in a bit of a bind, since Samsung in fact has some of the best capacities and processes in the business.  It obliges Apple to spend some money pushing Samsung's rivals to step up their game, but I suspect such expenditures will be considered investments in Apple's future.  But I wonder how far they'll go with this-- if they start to buy some of this capacity outright, or if they continue to do things like the Foxconn/Sharp (rumored) deal, where Apple money helps pay for the buildout of new capacities. 

The one thing Samsung has over Apple is their own manufacturing sources of basic componentry (and of course the ability to tailor designs to their own purposes, although I don't get the impression they really do much with that beyond "cool new tech check it out").  It would be ironic if Samsung's push to become an Apple competitor results in Apple creating strong manufacturing rivals to Samsung that wouldn't otherwise exist.  After all, in terms of sales, all Apple has to do is buy a given outfit's stuff to make them hugely successful.

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Originally Posted by Galbi 

To believe a rudimentary "publication" like dignities says a lot about the character of those who fall for its "facts" and "insider knowledge".

Those that "fell for it" sure held allot of Samsung stock: