Apple inks $240M deal with Samsung for 3M more iPad displays

Posted:
in Future Apple Hardware edited January 2014
Apple has agreed to pay Samsung nearly a quarter of a billion dollars as part of a new pact that will see the Korean electronics maker become the second major supplier of 9.7-inch display screens for current and future versions of the iPad.



The deal will guarantee Apple a supply of an additional 3 million displays for the upcoming tablet device over an unspecified amount of time, according to a high-ranking industry representative that recently spoke with The Korea Times.



"The most expensive component in the iPad is the display and touch-screen interface that costs $80 for all models," that person said. "The 9.7-inch display is more than twice the size of the iPhone 3GS screen and costs five times as much."



A little over a year ago, Apple entered into a similar 5-year, $500 million deal with LG Display Co. for flat panel displays through the 2013 calendar year. Although details of the arrangement were scarce at the time, it's now reported that agreement has been expanded to $800 million to cover the supply of 10 million iPad displays.



Apple chose LG as its primary iPad display screen supplier because it favored the in-plane switching (IPS) technology offered by South Korea-based electronics manufacturer. Although it's not as sharp as vertical alignment (VA) technology currently used by Samsung and Sony on their display panels, it offers a broader 178-degres viewing angel an faster response times.



As such, Samsung has agreed to hop on the IPS bandwagon and is currently in a development phase that will enable it to increase production of IPS displays that it plans to ship in bulk to "an American company" believed to be Apple, according to people with knowledge of the situation.



The move brings the total number of iPad display panels on order by Apple to 13 million, underscoring the Cupertino-based company's strategy of forming multi-supplier agreements for critical components that form the foundation to its highest-volume and most popular product offerings.



By sourcing key components from more than one partner, Apple builds a layer of protection into its supply chain that affords it leeway in the event that one supplier runs into problems filling orders. It also increases competition in the marketplace for the company's business, helping to drive down wholesale prices.



Meanwhile, an anonymous Samsung executive has also let slip that the company is "in deep talks" to supply its flat panel displays for Apple's upcoming 4G iPhones and iPads.



"As far as I know, Apple will use [our] LCD panels for its next iPhone models," the executive said. "We are receiving related orders from Apple,"
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Comments

  • Reply 1 of 65
    I don't understand this.



    Samsung just launched an iPhone killing GOOGLE phone. Just yuesterday.



    The phone has a 4 inch screen made by Samsung and runs Android. They are trying to kill the iPhone.



    Why would Apple choose to do business with them, when they are stabbing us in the back at the same time?



    They are in bed with Google, fer chrissakes!
  • Reply 2 of 65
    kasperkasper Posts: 940member, administrator
    Quote:
    Originally Posted by AppleRulez View Post


    I don't understand this.



    Samsung just launched an iPhone killing GOOGLE phone. Just yuesterday.



    The phone has a 4 inch screen made by Samsung and runs Android. They are trying to kill the iPhone.



    Why would Apple choose to do business with them, when they are stabbing us in the back at the same time?



    They are in bed with Google, fer chrissakes!



    They are the largest LCD supplier in the world...



    K
  • Reply 3 of 65
    Quote:
    Originally Posted by AppleRulez View Post


    I don't understand this.



    Samsung just launched an iPhone killing GOOGLE phone. Just yuesterday.



    The phone has a 4 inch screen made by Samsung and runs Android. They are trying to kill the iPhone.



    Why would Apple choose to do business with them, when they are stabbing us in the back at the same time?



    They are in bed with Google, fer chrissakes!



    That is how fanboys look at the situation that isn't how real business decisions are made.



    Samsung has done business with Apple for many years. In fact they have been the major supplier in fact maybe the only supplier Apple has used for RAM for years now. If Samsung has the best screens and they offer Apple the best deal that is how business works.



    LG also makes LCD screens for Windows users does that mean Apple shouldn't use them either?



    I have hitachi harddrives in my Windows systems and in my Macbook Pro. Go figure.
  • Reply 4 of 65
    Quote:
    Originally Posted by Kasper View Post


    They are the largest LCD supplier in the world...



    K



    In that case, Apple needs to manufacture there own LCD panels. Rewarding a disloyal company like Samsung with a Quarter-Billion dollars is crazy.
  • Reply 5 of 65
    I've wondered - How much more would it cost to manufacture electronics, such as this, in the United States. Would it be so much more that it would significantly add to the cost of the product. It's a shame we can't do this here.
  • Reply 6 of 65
    serkolserkol Posts: 39member
    $80 for one screen in huge bulk quantities - that's very expensive. I guess that screen is very high-quality.
  • Reply 7 of 65
    Quote:
    Originally Posted by AppleRulez View Post


    In that case, Apple needs to manufacture there own LCD panels. Rewarding a disloyal company like Samsung with a Quarter-Billion dollars is crazy.



    Yeah Samsung and other hardware companies should only supply Apple with hardware. Yes that would make perfect business sense on their part. Get a clue.
  • Reply 8 of 65
    benroethigbenroethig Posts: 2,782member
    Quote:
    Originally Posted by primedetailer View Post


    I've wondered - How much more would it cost to manufacture electronics, such as this, in the United States. Would it be so much more that it would significantly add to the cost of the product. It's a shame we can't do this here.



    Most of the war chest to set up and sustain operations.



    Quote:
    Originally Posted by AppleRulez View Post


    I don't understand this.



    Samsung just launched an iPhone killing GOOGLE phone. Just yuesterday.



    The phone has a 4 inch screen made by Samsung and runs Android. They are trying to kill the iPhone.



    Why would Apple choose to do business with them, when they are stabbing us in the back at the same time?



    They are in bed with Google, fer chrissakes!



    Quote:
    Originally Posted by AppleRulez View Post


    In that case, Apple needs to manufacture there own LCD panels. Rewarding a disloyal company like Samsung with a Quarter-Billion dollars is crazy.





    Ah, the current generation of Mac user. They they can stop dealing with all these disloyal companies who deal with the enemies and don't serve only Apple and the almighty lord Steve Jobs.



    Wake up and try to figure out how business is run in the real world instead of the Apple fanboy world. If Apple did what you wanted, they'd be out of business because they wouldn't have parts or manufacturing partners for their products.



    Lets take a look here



    Disloyal competitor LG supplies Apple with Screens and optical drives

    Disloyal competitor Sony supplies Apple with optical drives

    Disloyal competitor Samsung supplies hard drives and screens

    Disloyal competitor Toshiba supplies hard drives

    Disloyal competitor ASUS builds the damn things for Apple.
  • Reply 9 of 65
    Quote:
    Originally Posted by extremeskater View Post


    Yeah Samsung and other hardware companies should only supply Apple with hardware. Yes that would make perfect business sense on their part. Get a clue.





    The trolls miss the point. It is not that they also sell to Apple's competitors, THEY THEMSELVES are a competitor.



    They just released an "iPhone Killer".
  • Reply 10 of 65
    Quote:
    Originally Posted by

    "The most expensive component in the iPad is the display and touch-screen interface that costs $80 for all models," that person said. "The 9.7-inch display is more than twice the size of the iPhone 3GS screen and costs five times as much."






    [/url][/c]



    The speaker is inaccurate and misleading.



    The iPhone has 153,600 pixels, the iPad has 786,432; it's 5.12 times as big so the 5 times the price of the iPhone screen seems reasonable.
  • Reply 11 of 65
    applestudapplestud Posts: 367member
    most often, a single M denotes thousands, while two M's denotes millions. Just sayin'
  • Reply 12 of 65
    gfizgfiz Posts: 32member
    Quote:
    Originally Posted by AppleRulez View Post


    In that case, Apple needs to manufacture there own LCD panels. Rewarding a disloyal company like Samsung with a Quarter-Billion dollars is crazy.



    '



    wow, talk about disillusioned
  • Reply 13 of 65
    s4mb4s4mb4 Posts: 267member
    wow, 3 million more... that is actually good new. that means the iPad is going to sell like crazy. 8 more days :-)
  • Reply 14 of 65
    cvaldes1831cvaldes1831 Posts: 1,832member
    Quote:
    Originally Posted by AppleRulez View Post


    In that case, Apple needs to manufacture there own LCD panels. Rewarding a disloyal company like Samsung with a Quarter-Billion dollars is crazy.



    Again, more evidence of how typical fanboys know nothing about the economics of electronics manufacturing and general business.



    The flat-panel display market is cutthroat and the margins are thin. If Apple could save oodles of money by staffing their own flat-panel design team, building a new manufacturing plant, and making their own panels, they probably would have considered it.



    Let it go. Apple knows how to manufacture consumer electronics. You do not.



    If the board of directors put you in charge of running Apple, I'd short the stock.
  • Reply 15 of 65
    It's always some kind of "Apple should make their own ( some component )" or "Apple should buy ( some company )"... I'm getting used to the pattern.
  • Reply 16 of 65
    Quote:
    Originally Posted by AppleRulez View Post


    I don't understand this.



    Samsung just launched an iPhone killing GOOGLE phone. Just yuesterday.



    The phone has a 4 inch screen made by Samsung and runs Android. They are trying to kill the iPhone.



    Why would Apple choose to do business with them, when they are stabbing us in the back at the same time?



    They are in bed with Google, fer chrissakes!



    This is simple business. Apple competes with Samsung in some ways and has a mutually beneficial relationship in others. There's no reason to think any rivalry is personal (unlike Apple and Google). As shareholders, we absolutely do not want Apple to "cut off its nose to spite its face".
  • Reply 17 of 65
    Quote:
    Originally Posted by AppleRulez View Post


    The trolls miss the point. It is not that they also sell to Apple's competitors, THEY THEMSELVES are a competitor.



    They just released an "iPhone Killer".



    Trolls...LOL. Read the entire thread I guess everyone except you is a troll. This is business. Samsung has supplied Apple with hardware for a very long time well before any deemed iPhone Killer came out.
  • Reply 18 of 65
    Quote:
    Originally Posted by cvaldes1831 View Post


    Again, more evidence of how typical fanboys ... .



    No need to name-call. Different people have different levels of sophistication in different areas of life. Cut him some slack and allow him to get educated.
  • Reply 19 of 65
    cvaldes1831cvaldes1831 Posts: 1,832member
    Quote:
    Originally Posted by delreyjones View Post


    No need to name-call. Different people have different levels of sophistication in different areas of life. Cut him some slack and allow him to get educated.



    There is nothing wrong with being a fanboy. Plus, there are some educated ones (oddly, they come off much less as fanboys).



    That's fine if people have different levels of sophistication in different areas of life. However, this is a forum about Apple and a thread about consumer electronics manufacturing economics. One needs a modicum of understanding about this topic if one is to contribute successfully to this specific discussion.



    Okay, here's some education. Here's How to Ask Questions The Smart Way.



    Enjoy!
  • Reply 20 of 65
    msanttimsantti Posts: 1,377member
    Quote:
    Originally Posted by AppleRulez View Post


    I don't understand this.



    Samsung just launched an iPhone killing GOOGLE phone. Just yuesterday.



    The phone has a 4 inch screen made by Samsung and runs Android. They are trying to kill the iPhone.



    Why would Apple choose to do business with them, when they are stabbing us in the back at the same time?



    They are in bed with Google, fer chrissakes!



    Spare me the dramatics.



    This is strictly business. Good for Samsung and good for Apple.



    And Apple has been dealing with Samsung for quite a while.
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