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Samsung denies rumors of price increase for Apple chip production - report

post #1 of 35
Thread Starter 
Contradicting reports out of the Far East are divided on whether Samsung has actually chosen to increase the price of mobile processors for Apple.

An unnamed Samsung official spoke with Seoul-based newspaper The Hankyoreh to deny earlier claims that the company had forced a 20 percent price hike on Apple, as noted by The Street on Wednesday. That disputes an earlier rumor published on Monday by Korean newspaper Chosun Ilbo.

The official reportedly claimed that Samsung's prices "are set at the beginning of the year and aren't changed easily."

The original, now-disputed report cited an unnamed person allegedly familiar with negotiations between the two companies. But Wednesday's report also does not feature a name or direct quote from the unknown Samsung official.

Whether or not Samsung has raised its prices on Apple, there is a growing rift between the two companies as they compete in the smartphone, computer and tablet spaces, to name a few. While Samsung and Apple are bitter rivals, Samsung is also one of Apple's largest suppliers.

Apple's custom-designed chips found on the iPhone, iPad, iPod touch and Apple TV are built by Samsung at its chip fabrication plant in Austin, Tex. There have been claims that Apple plans to move production away from Samsung to Taiwan Semiconductor Manufacturing Co., but so far Samsung remains the sole supplier of custom ARM-based processors for Apple's mobile devices.

Samsung Austin Plant
Samsung's Austin, Texas Plant | Source: Samsung


Last week, yet another unsourced report claimed that Samsung was expecting to lose a portion of its future chip orders from Apple. It indicated that the Korean electronics company may put off construction of a new fabrication facility because of the expected decrease in orders.

If Samsung does in fact increase the price it charges Apple for building its mobile processors, the change is expected to reduce the company's overall margins by as much as 2 percentage points, Gene Munster of Piper Jaffray said earlier Wednesday. Munster also said he would not be surprised if a price increase from Samsung turned out to be true, "given the legal tension" between the two companies.

Apple's battle with Samsung has remained heated, even as Apple has reached licensing agreements with other handset makers, such as a newly announced deal with HTC. In comments publicized this week Shin Jong-kyun, the head of Samsung's mobile and IT division, indicated his company doesn't intend to negotiate a settlement with Apple "at all."

The terms of HTC's settlement with Apple are secret, but market watchers have suggested HTC is likely paying Apple between $6 and $8 for each phone it sells. The deal is predicted to pay $280 million to Apple in a year, an amount that Shaw Wu with Sterne Agee said will be "immaterial" to the iPhone maker, which is projected to secure $48 billion in net income in its fiscal year 2013.
post #2 of 35
Did anyone really believe it was so easy to just jack prices on a signed contract?
post #3 of 35
stock manipulation so easy nowadays with unverified blogs
post #4 of 35
Apple have probably increased their demand on the faster more expensive ones. So they could be paying 20% more per unit with no price increase.
post #5 of 35
Stuff like this is great. The iHater crowd is all stirred up over the alleged price increase. C|net crowd went wild cheering Samsung for sticking it to Apple same way they did when the rumor mill said Samsung was not going to supply displays anymore. Then next day, WHAM, rumor shot down by Samsung. It's worth the price of a soda and popcorn to watch this show, lawn chair all comfy.
post #6 of 35
To which Samsung added, "but thanks for the idea."

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

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post #7 of 35
Quote:
Originally Posted by AppleInsider View Post


Whether or not Samsung has raised its prices on Apple, there is a growing rift between the two companies as they compete in the smartphone, computer and tablet spaces, to name a few. While Samsung and Apple are bitter rivals, Samsung is also one of Apple's largest suppliers, AND...

Apple is one of Samsung's largest industrial design providers.

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post #8 of 35
"AppleInsider will continue to stay with this story as it develops and milk it for every drop of click bait."

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #9 of 35

I just shook my head when I first read the price increase rumors.  Didn't even bother to post replies to the wannabe-armchair-accountants and the typical anti-apple brigade.

Last time I checked, companies sign what are called "contracts" with all the pricing built in for a given amount of time.  This was no different.

But no, iHaters, trolls, and Fandroid crybabies just itch to get in their 2-cents of whimsical so-called wisdom on why it makes perfect sense.

Idiots.  Simple as that, and I rarely use that word to describe someone.

post #10 of 35

Agreed. Both supporters and detractors of Apple were all too happy to believe the story. One side claiming it's proof of how unscrupulous Samsung is while the other says good for 'em, get their $billion back. Why do members take some rumors as fact and other rumors as ridiculous? I think it all comes down to what you want to believe.

melior diabolus quem scies
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melior diabolus quem scies
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post #11 of 35
The Samsung price increase ruse is just another in a series of unfounded, poorly sourced anti-AAPL rumors. For example, on November 9th, a Bloomberg West TV/Radio columnist lambasted Tim Cook as having lost his "Supply Chain" touch. The following Monday, reports surfaced that the 4G versions of the iPad Mini and the iPad4 were SHIPPING! Oh, and the iPhone5 wait is down to two weeks for some models and to ZERO for many others at Sprint.

As a long time AAPL shareholder, I've seen this passion play many times before. It always starts at the end of September, but by the middle of December, when the crowds at the Apple Stores make the evening news, suddenly AAPL is once again, the halo stock.

Use these periods of short-seller negativity to add to your position. AAPL's Q1 results will blow away Wall Street.
post #12 of 35
Quote:
Originally Posted by Gatorguy View Post

Agreed. Both supporters and detractors of Apple were all too happy to believe the story. One side claiming it's proof of how unscrupulous Samsung is while the other says good for 'em, get their $billion back. Why do members take some rumors as fact and other rumors as ridiculous? I think it all comes down to what you want to believe.


Gone are the days of real journalism.  To report facts only.  This is what I hate about our hyper-connected society now.  While such easy access to information is a great thing, it's so incredibly easy for someone to overhear someone sitting at another table about a "what if" thing, misunderstand it, post it somewhere and have it take off like wildfire.

Media outlets (including AppleInsider) should be ashamed for click-whoring.  I'm just getting fed up with the direction (downhill) the media is taking everything with having zero concern with the ramifications.

Sad that no penalty can be dropped on folks that post nonsense and have it possibly affect the stock price of any given company.  Downright manipulation as far as I'm concerned.

post #13 of 35

Well said!

post #14 of 35
Quote:
Originally Posted by sflocal View Post

 

Media outlets (including AppleInsider) should be ashamed for click-whoring.  I'm just getting fed up with the direction (downhill) the media is taking everything with having zero concern with the ramifications.
 

Somehow I'm sure that this involves Jill Kelly since she is a South Korean honorary consul.

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post #15 of 35
$280M in a year ... $6-8 per phone ...

Is HTC selling 35 to 45M smartphones per year?
post #16 of 35
Samsung chip prices are "quite smooth" then?
post #17 of 35

>Somehow I'm sure that this involves Jill Kelly

 

You're living dangerously.  You know at least _one_ of those women is le femme Nikita and do you really want a visit from one of them late at night?

 

(Apple products have become so thin they won't stop many projectiles these days!)

post #18 of 35

Does Samsung want to encourage buyers of their products to pay cash in advance by offering discounts or do they want them to hold on to their cash for 30, 60 or 90 day contract terms?

 

The simple answer to why the 20% price increase rumour makes as much sense as trucks full of nickels pulling into Cupertino.

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Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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post #19 of 35
Quote:
Originally Posted by indiekiduk View Post

stock manipulation so easy nowadays with unverified blogs
Correct. Corporate espionage in plain sight...
post #20 of 35

The chip division most likely has some say in it's own agenda: Apple is a big customer....

post #21 of 35
Quote:
Originally Posted by Gatorguy View Post

Agreed. Both supporters and detractors of Apple were all too happy to believe the story. One side claiming it's proof of how unscrupulous Samsung is while the other says good for 'em, get their $billion back. Why do members take some rumors as fact and other rumors as ridiculous? I think it all comes down to what you want to believe.

Absolutely. Ask any politician what's in their bag of tricks and they'll pull this one out every time. Tel l'em what they want to hear and they'll believe it no matter what.
post #22 of 35

And because there will be no chip price increase... the stock falls over $6.00. Makes sense to me. 1hmm.gif

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #23 of 35
Quote:
Originally Posted by Rayz View Post

Did anyone really believe it was so easy to just jack prices on a signed contract?

One reasonable way to look at it is that Samsung has planned to charge more for the next contract they have with Apple, but that should be the goal regardless. Maybe they can. If we assume that TSMC et al. aren't being to produce the numbers and/or quality the rapidly growing Apple needs then Samsung could very well be in a position to say "We want more money." That's business as usual so the original story wasn't surprising in any way, and neither is Samsung denying the rumours.

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post #24 of 35
Quote:
Originally Posted by sflocal View Post


Gone are the days of real journalism.  To report facts only.  This is what I hate about our hyper-connected society now.  While such easy access to information is a great thing, it's so incredibly easy for someone to overhear someone sitting at another table about a "what if" thing, misunderstand it, post it somewhere and have it take off like wildfire.

Media outlets (including AppleInsider) should be ashamed for click-whoring.  I'm just getting fed up with the direction (downhill) the media is taking everything with having zero concern with the ramifications.

Sad that no penalty can be dropped on folks that post nonsense and have it possibly affect the stock price of any given company.  Downright manipulation as far as I'm concerned.


+100

post #25 of 35
Quote:
Originally Posted by sflocal View Post


Gone are the days of real journalism

What?

 

Gone are the days of real computers.  Now we have "tablets."

 

Gone are the days of real programs.  Now we have "apps."

 

Gone are the days of real records.  Now we have "downloads."

 

Gone are the days of real engineering.  Now we have "design."

 

Gone are the days of real people.  Now we have "consumers."

 

Etc.  Try it, it's so easy.  Every generation gets the journalism it deserves.

post #26 of 35
Quote:
Originally Posted by AppleInsider View Post

The original, now-disputed report cited an unnamed person allegedly familiar with negotiations between the two companies. But Wednesday's report also does not feature a name or direct quote from the unknown Samsung official.

So the rumored rumors have a rumor that there is a rumored price hike from some rumored source in a rumored publication. And a rumored rumor source denies the rumored rumors in a different rumored publication.

1oyvey.gif1oyvey.gif1oyvey.gif
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #27 of 35
Quote:
Originally Posted by RFHJr View Post

The Samsung price increase ruse is just another in a series of unfounded, poorly sourced anti-AAPL rumors. For example, on November 9th, a Bloomberg West TV/Radio columnist lambasted Tim Cook as having lost his "Supply Chain" touch. The following Monday, reports surfaced that the 4G versions of the iPad Mini and the iPad4 were SHIPPING! Oh, and the iPhone5 wait is down to two weeks for some models and to ZERO for many others at Sprint.
As a long time AAPL shareholder, I've seen this passion play many times before. It always starts at the end of September, but by the middle of December, when the crowds at the Apple Stores make the evening news, suddenly AAPL is once again, the halo stock.
Use these periods of short-seller negativity to add to your position. AAPL's Q1 results will blow away Wall Street.

 

You seen the report about Apple on fast money, they compare Apple to coca cola, Apple would be a better value play at this point then coke.  I think Apple was about to rebound with lots of buyers at the low 540's, but the market correction made Apple break support and it gap down in the end. 

post #28 of 35

deleted


Edited by MacRulez - 1/28/13 at 8:35pm
post #29 of 35
Quote:
Originally Posted by jragosta View Post


So the rumored rumors have a rumor that there is a rumored price hike from some rumored source in a rumored publication. And a rumored rumor source denies the rumored rumors in a different rumored publication.
1oyvey.gif1oyvey.gif1oyvey.gif

 

I heard if you die in a rumor, your mind goes straight to Forum and you spend eternity believing whatever bullshit rumor you want to believe.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
Reply

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
Reply
post #30 of 35
Quote:
Originally Posted by markLouis View Post

What?

 

Gone are the days of real computers.  Now we have "tablets."

 

Gone are the days of real programs.  Now we have "apps."

 

Gone are the days of real records.  Now we have "downloads."

 

Gone are the days of real engineering.  Now we have "design."

 

Gone are the days of real people.  Now we have "consumers."

 

Etc.  Try it, it's so easy.  Every generation gets the journalism it deserves.

 

What?

 

 

Gone are the days of rampant music piracy. Now we have "iTunes."

 

Gone are the days of slow, crappy Internet on your phone. Now we have "iPhones with LTE."

 

Gone are the days of AAPL trading at $16. Now we have "the world's most valuable tech company."

 

Gone are the days of "Apple should sell off its hardware business and license Mac OS to clonemakers." Now we have "Microsoft wants to make its own hardware."

 

Gone are the days of Michael Dell telling Apple to shut it down and give the money back to shareholders. Now we have "Apple making money hand over fist for shareholders while DELL trades under $10."

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
Reply

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
Reply
post #31 of 35
Apple apologists out in full force as usual
post #32 of 35
Comment deleted by author
Edited by AlexN - 11/15/12 at 3:03pm
post #33 of 35
Quote:



Samsung and Apple shook hands on 20 percent A6 fee increase
Reported by Kenny Doan on Thursday, November 15 2012 6:40 am

Recently, there was a report floating around suggesting Samsung had instituted a 20 percent fee hike on future A6 processors for Apple out of the blue. While some of us would love to see Samsung and Apple go blow for blow, the report of the increased A6 price was actually an agreed upon deal between Mr. A and Mr. S, not a blindsided cheap shot by Cupertino's competitor from across the pond.

According to The Street, Apple and Samsung agreed to the increase earlier this year. Meaning, the 20 percent fee hike was not a low blow aimed at Apple’s precious seeds. Rather, the two consumer tech-giant grudgingly shook on the deal.

An analyst for Piper Jaffray, Gene Munster, estimated that the increase in A6 prices will only cut Apple’s gross margins by 1-2 percent. Even so, it’s inevitable that Apple will look for other foundry options in the near future, and all fingers seem to be pointing at Taiwan's TSMC.

The blood between Apple and Samsung has been boiling for quite some time, but regardless of the unpleasantries Apple still wants the best prices on components for their gadgets. Continual reliance on Samsung for Apple chips will favor Samsung in the long run in terms of pricings negotiability.

Word out of Taiwan is that TSMC will begin producing 20nm quad-core chips for Apple by late 2013. The current-gen Apple A6 chip is based on Samsung’s 32nm process. Samsung, too, has plans to move their Exynos line to the 20nm (or even 14nm) process, but chances are the South Korean firm won’t be mass producing Apple’s future chip using its factory and fabrication process.

TSMC and Samsung have both invested heavily in the facilities and fabrication technology, but only one will walk away with Apple’s business.

Read more: http://vr-zone.com/articles/samsung-and-apple-shook-hands-on-20-percent-a6-fee-increase/17875.html#ixzz2CHkKPedm
post #34 of 35
Quote:
Originally Posted by Prima Kingu View Post

Samsung and Apple shook hands on 20 percent A6 fee increase
Reported by Kenny Doan on Thursday, November 15 2012 6:40 am

That's not what is being suggested here. This rumor says that Apple is going to have to pay more for the same product - which is not the case.

The article you cited simply says that the A6 is more expensive than the A5. That is hardly surprising, nor is it anything to get worried about. A newer CPU with a lot more power and more chip area will be more expensive than the one it replaces. Big deal.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
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post #35 of 35
Quote:
Originally Posted by Gatorguy View Post

....... I think it all comes down to what you want to believe.

 

Can't upvote you enough for being rational about this.  What a refreshing thing to see in here.

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