Apple is one of the original ARM shares holders and one of the most knowledgable of the ARM architecture. Apple got many edge over Samsung on their chips design with help of P.A Semi and Intrinsity acquisions. It worth noting Intrinsity was responsible for Samsung's Hummingbirds design.
That must have been why Apple had to rely on Samsung designed / manufactured Hummingbird (tweaked for Apple) for earlier iPhones and iPod.. all because Apple knew too much.. LOL!!
Nope. Samsung mobile's profit is now greater than all other divisions profit combined. Samsung's semi profit margin was never all that great - Samsung is certainly making a killing in mobile business. Also remember Apple is a bargain hunter - Samsung is much better off without Apple.
Way to try and spin off the loss of billions in sales as a non-issue.
Part of the reason Samsung is out front in semiconductors is because of Apple. Samsung wouldn't have money to expand their production and build new lines without someone to buy all their chips. It also reduces their economy of scale which means either higher prices for their other customers or reduced margins on their other sales.
Don't kid yourself, this is bigger than just the loss of a few sales.
That must have been why Apple had to rely on Samsung designed / manufactured Hummingbird (tweaked for Apple) for earlier iPhones and iPod.. all because Apple knew too much.. LOL!!
Yep, and Apple ended up snatching all Samsung ARM ressources and bring every aspect of cpu design in-house, leading ARM cpu market ever since.
I understand why this has happened, and I don't think the fault lies at Apple's feet to any great degree, but nevertheless it doesn't seem like a good development for the company to have a hateful relationship with anyone. I hope Apple aren't going to take this down the road they did with Microsoft and IBM in the past, rivals are fine to have, but enemies just lead to destructive behaviour that distract from making good products.
Maybe I'm wrong and Apple can tap into this productively and make iPhones and iPads that blow Samsung even further out of the water. But if they cut off their nose to spite their face then we all lose.
Agree with blastdoor; but even the move to TSMC is normal supply chain management.It is normal that with these kind of volumes, and this critical kind of dependency on the supply chain performance Apple needs to differentiate.
This cannot come soon enough. Given what I've observed with Samsung, I believe there is a 30% or greater chance the Samsung fabrication side of the business has shared confidential Apple CPU design info with their mobile team
@ $10 billion/year, Apple business is the equivalent to 20 million smartphone sales ($10B / $500 per phone). It's a major hit to their overall business
That underestimates things. Their contribution margin (roughly, the gross margin) on chips is almost certainly considerably higher than the gross margin on cell phones. So they need to sell more than $10 B of cell phones to make the same margin as they do on Apple's semiconductor business.
So you're freely admitting you want Apple to become a monopoly in every industry possible?
No one ever said any such thing. What is being suggested is that Apple should not rely on direct competitors to manufacture their components. There's nothing in that statement that even remotely suggests that Apple should be a monopoly.
Why do you think that Samsung would want to steal CPU design from Apple? It is a proprietary design specialized for Apple hardware and software, which makes the incentive to duplicate it pretty much non-existent. Sort of ironic though how Apple has poached a Samsung engineer. Why is that necessary if they are so brilliantly awesome at superior design?
Well, for starters, Apple seems to be getting incredible performance out of their chips - even when Samsung is using "faster" chips in their designs. Some of that is the OS, but some also involves hardware tweaks. Furthermore, there's a history of Samsung copying Apple - even their semiconductor unit was shown in the court case to be doing so.
And it's not unusual for someone to hire a specialist in one area - even if they're the market leader. There's absolutely nothing to be read into the fact that Apple hired a Samsung engineer.
Nope. Samsung mobile's profit is now greater than all other divisions profit combined. Samsung's semi profit margin was never all that great - Samsung is certainly making a killing in mobile business. Also remember Apple is a bargain hunter - Samsung is much better off without Apple.
That's an overly simplistic evaluation. The amount Samsung gained by stealing Apple's technology can not be determined by looking at their current profits. Rather, you really need to evaluate 3 figures:
1. Their current profits.
2. Their profits if they had done nothing different than what they did before the iPhone came out.
3. Their profits if they had taken guidance and inspiration from the iPhone but without making slavish copies.
I would suggest that the difference between #1 and #3 is the benefit that Samsung gained by their slavish copies - and is undoubtedly much smaller than their entire current profit (which is the number you want to use).
That must have been why Apple had to rely on Samsung designed / manufactured Hummingbird (tweaked for Apple) for earlier iPhones and iPod.. all because Apple knew too much.. LOL!!
Still the usual troll.
Funny how Samsung can design their own chips but they can't even design an icon to avoid infringing Apple's designs.
Also funny how the A6 (a 100% original design by Apple) can outperform all these monster quad-core overclocked SoC's. Yeah, they really know how to design chips all right. They're making the same mistakes Intel made years ago thinking more cores or more GHz is going to be the route to increased performance.
That underestimates things. Their contribution margin (roughly, the gross margin) on chips is almost certainly considerably higher than the gross margin on cell phones. So they need to sell more than $10 B of cell phones to make the same margin as they do on Apple's semiconductor business.
I don't think the margin on the phones is that different than the margin on contract manufacture of processors, is it?
Although the loss of Apple as a foundary client will hurt them, it wont hurt them as much as some proponents here like to boast.
Apple is notorious for squeezing their suppliers' profit margins to be hair thin.
Samsung is getting most of their profits from the mobile phone division, not from their semiconductor business like they used to.
Also, like Samsung said, the loss of Apple will help alleviate space for other companies to to take up Samsung's time, namely other Qualcomm and NVIDIA as TSMC seems to alot most of their resources to serve one customer, namely Apple.
Most of this shuffle wont really affect Samsung in the long run.
It will only hurt Apple as switching costs are fairly high not to mention the yields from TSMC manufacturing base. TSMC has been notorious previously for quality control issues from their chip manufacturing business, namely the NVIDIA GEFORCE chip fiasco. Look it up.
Plus, TSMC doesnt even have enough capacity to produce NVIDIA chips today. How in the heck are they going to produce the A7 ( in sufficient yields and reliability) two years from now? Throwing billions wont cut it as this is a fab we are talking about not some assembly plant.
Samsung is the only manufacturer on the market right now that can deliver guaranteed yields as well as quality. They have proven track record of both. Apple is just butthurt and perhaps in a panic after realizing their lawsuit isnt going quite as planned. Their recent "win" in the California courts? Yeah, that will most likely get a retrial or even thrown out all together. The appeals court will be using the abuse of discretion from Judge Koh's judgement and use it for the appeals case.
Also, last point, if Apple keeps switching suppliers due to personal reasons, their relations with them wont be a good one. Who wants to work with a client who is fickle?
I hope their severing ties with Samsung has a better outcome than the last one they had: Google.
I don't think the margin on the phones is that different than the margin on contract manufacture of processors, is it?
The industry average for semiconductor gross margins is around 65%. Samsung was reported to have margins close to the industry average.
The industry average for mobile phones is quite low - certainly nowhere near 65%. And even that overestimates how much Samsung got by stealing Apple's technology. Arguably, they would have sold a lot of the high end phones, anyway. People who are paying $750 to buy a Galaxy SIII instead of $750 to buy an iPhone probably had some other reason for buying the SIII - so the IP theft may not have helped all that much. OTOH, the "looks just like an iPhone, but hundreds of dollars less" depends directly on their slavish imitation of Apple's products - and helps them to sell mostly low margin phones.
Yep, and Apple ended up snatching all Samsung ARM ressources and bring every aspect of cpu design in-house, leading ARM cpu market ever since.
LOL!! Oh, you mean Intrinsity? Of course, Samsung couldn't have possibly produce its own ARM based chips without it. LOL!! So much for Apple's superior knowledge of the ARM arch..
I understand why this has happened, and I don't think the fault lies at Apple's feet to any great degree, but nevertheless it doesn't seem like a good development for the company to have a hateful relationship with anyone. I hope Apple aren't going to take this down the road they did with Microsoft and IBM in the past, rivals are fine to have, but enemies just lead to destructive behaviour that distract from making good products.
Maybe I'm wrong and Apple can tap into this productively and make iPhones and iPads that blow Samsung even further out of the water. But if they cut off their nose to spite their face then we all lose.
You are wrong, but not about what you think you're wrong about.
Are you aware that the terms "love-hate" and "hate-hate" is a purely "food coloring" added by the press? In this case, it's in the English title of the original Korea Times article. AppleInsider for no clear reason distilled the facts by blending that characterization into the body of their re-reported article, perhaps to obfuscate its source, or perhaps for no reason at all. No one from either company uses the terms "love" or "hate" to characterize their business relationship. In fact, both companies declined to comment on the original article. The only fact the article reported was that Apple did not collaborate with Samsung on the development of the A6, using Samsung's manufacturing capability only. And that's followed by "analysts" who start painting their opinion to the facts--BUT STILL NONE OF THEM characterized Apple-Samsung partnership as "hate-hate." Ask yourself this: WHO SAID "HATE"? If you dig hard enough, you'll see that this is a fabrication by whoever came up with the title of the original article.
In other words, facts are boring. Let's dramatize everything, let's use war metaphors, so people will care, they'll hang on every word, they'll post comments and this will cause others to post replies, and this will drive up site engagement! Money from ads! AppleInsider didn't even write the original content! So it's virtually free money!
Apple have a huge problem. They are to big.
Apple needs about 30K wafers starts per month. This is rapidly growing to about 55K wafers starts in 2014-15.
That is a lot of chips.
Apple needs a whole foundry by themselves. The best way is to buy an idle plant from Intel or that Apple pays TSMC a bunch of money for a whole line to them selves.
Having an own high quality foundry would be a huge advantage for Apple. Especially since they will move everything to their own A class SoC.
Yep Apple needs a foundry but apparently they don't realize that yet. However buying a used foundry won't do, they would need the newest technology possible. It is a huge investment, probably on the order of 5-7 billion dollars.
Todays A6 is as fast as the fastest intel per mhz. (and I know... Intel have 6 cores are clocked 3-4 times higher, so Intel is faster. But nothing stops Apple from designing quad or octo core A6 feed more power to make it 2.5ghz.
We have no idea about how fast A6 can actually operate but everything tells me it is a lot faster than the relatively slow clock rates in iPhone. It is also hard to tell how much provision has been left for more CPU cores in the current design. There are smart people at work at Apple so I see no problem at all for them to deliver a quad core chip, an A6X for iPad 4.
Nvidia will introduce a 8 core ARM late this year/q1 next year)
Yes but what hardware and software architecture will support those cores? The real trick in this industry is leveraging the hardware you have to the best possible efficiency. Having 8 cores in a phone or tablet would be a waste in my mind. 64 bit hardware would be needed before 8 cores makes sense.
In general though you are right Apple needs to wake up and smell the coffee. They need their own production plants.
That must have been why Apple had to rely on Samsung designed / manufactured Hummingbird (tweaked for Apple) for earlier iPhones and iPod.. all because Apple knew too much.. LOL!!
You really should do some more research on this subject because you don't know what you are talking about.
LOL!! Oh, you mean Intrinsity? Of course, Samsung couldn't have possibly produce its own ARM based chips without it. LOL!! So much for Apple's superior knowledge of the ARM arch..
Samsung is not a R&D shop, they are OEM manufacturer, Samsung have not create their ARM design in-house, Intrinsity engineers was the real brains behind Samsung's CPU.
Way to try and spin off the loss of billions in sales as a non-issue.
Part of the reason Samsung is out front in semiconductors is because of Apple. Samsung wouldn't have money to expand their production and build new lines without someone to buy all their chips. It also reduces their economy of scale which means either higher prices for their other customers or reduced margins on their other sales.
Don't kid yourself, this is bigger than just the loss of a few sales.
ROFL!! Firstly, Apple' share of Samsung Electronic's overall Sales is still less than 8% - and Apple wasn't even Samsung's largest customer until last year (Sony #1). Even if you combine all the sales from Apple last several years, it couldn't still pay for Samsung's capital expenditure for 2012 or $41B. Samsung and other South Korean component makers like Hynix and LG have been well "out in front" in semiconductor/display business since the 90's and it has very little or nothing to do with Apple, which back in the late 90's was on the brink of collapse. Samsung semi's revenue has been flat for years now and could possibly face a few disappointing quarters - after all, nobody, other than Samsung and Toshiba, is really making money in the DRAM/NAND business now; almost everyone in the display business is losing money. But that's the nature of their business; it has little to do with Apple. Samsung mobile can easily make up for the loss in the growing mobile (smartphone) and mobile components business.
Apple is notorious for squeezing their suppliers' profit margins to be hair thin.
I'm always amused by characterizations of free-market B2B contracts, negotiated between two very large corporate entities who are both fully capable of negotiating favorable terms in their own self-interest as big greedy Apple unfairly squeezing the little guy until they're forced to give up profit margins.
You forgot to mention that Apple promised to kill a newborn Labrador Retriever puppy for every $1000 in profit Samsung makes.
Comments
Quote:
Originally Posted by BigMac2
Apple is one of the original ARM shares holders and one of the most knowledgable of the ARM architecture. Apple got many edge over Samsung on their chips design with help of P.A Semi and Intrinsity acquisions. It worth noting Intrinsity was responsible for Samsung's Hummingbirds design.
That must have been why Apple had to rely on Samsung designed / manufactured Hummingbird (tweaked for Apple) for earlier iPhones and iPod.. all because Apple knew too much.. LOL!!
Part of the reason Samsung is out front in semiconductors is because of Apple. Samsung wouldn't have money to expand their production and build new lines without someone to buy all their chips. It also reduces their economy of scale which means either higher prices for their other customers or reduced margins on their other sales.
Don't kid yourself, this is bigger than just the loss of a few sales.
Quote:
Originally Posted by tooltalk
That must have been why Apple had to rely on Samsung designed / manufactured Hummingbird (tweaked for Apple) for earlier iPhones and iPod.. all because Apple knew too much.. LOL!!
Yep, and Apple ended up snatching all Samsung ARM ressources and bring every aspect of cpu design in-house, leading ARM cpu market ever since.
I understand why this has happened, and I don't think the fault lies at Apple's feet to any great degree, but nevertheless it doesn't seem like a good development for the company to have a hateful relationship with anyone. I hope Apple aren't going to take this down the road they did with Microsoft and IBM in the past, rivals are fine to have, but enemies just lead to destructive behaviour that distract from making good products.
Maybe I'm wrong and Apple can tap into this productively and make iPhones and iPads that blow Samsung even further out of the water. But if they cut off their nose to spite their face then we all lose.
Quote:
Originally Posted by bdkennedy1
How is that Samsung firewall coming along?
Some Samsung's execs should be fire.
That underestimates things. Their contribution margin (roughly, the gross margin) on chips is almost certainly considerably higher than the gross margin on cell phones. So they need to sell more than $10 B of cell phones to make the same margin as they do on Apple's semiconductor business.
I don't expect Apple to enter the TV market. Could be wrong, though.
No one ever said any such thing. What is being suggested is that Apple should not rely on direct competitors to manufacture their components. There's nothing in that statement that even remotely suggests that Apple should be a monopoly.
Well, for starters, Apple seems to be getting incredible performance out of their chips - even when Samsung is using "faster" chips in their designs. Some of that is the OS, but some also involves hardware tweaks. Furthermore, there's a history of Samsung copying Apple - even their semiconductor unit was shown in the court case to be doing so.
And it's not unusual for someone to hire a specialist in one area - even if they're the market leader. There's absolutely nothing to be read into the fact that Apple hired a Samsung engineer.
That's an overly simplistic evaluation. The amount Samsung gained by stealing Apple's technology can not be determined by looking at their current profits. Rather, you really need to evaluate 3 figures:
1. Their current profits.
2. Their profits if they had done nothing different than what they did before the iPhone came out.
3. Their profits if they had taken guidance and inspiration from the iPhone but without making slavish copies.
I would suggest that the difference between #1 and #3 is the benefit that Samsung gained by their slavish copies - and is undoubtedly much smaller than their entire current profit (which is the number you want to use).
Quote:
Originally Posted by tooltalk
That must have been why Apple had to rely on Samsung designed / manufactured Hummingbird (tweaked for Apple) for earlier iPhones and iPod.. all because Apple knew too much.. LOL!!
Still the usual troll.
Funny how Samsung can design their own chips but they can't even design an icon to avoid infringing Apple's designs.
Also funny how the A6 (a 100% original design by Apple) can outperform all these monster quad-core overclocked SoC's. Yeah, they really know how to design chips all right. They're making the same mistakes Intel made years ago thinking more cores or more GHz is going to be the route to increased performance.
I don't think the margin on the phones is that different than the margin on contract manufacture of processors, is it?
Although the loss of Apple as a foundary client will hurt them, it wont hurt them as much as some proponents here like to boast.
Apple is notorious for squeezing their suppliers' profit margins to be hair thin.
Samsung is getting most of their profits from the mobile phone division, not from their semiconductor business like they used to.
Also, like Samsung said, the loss of Apple will help alleviate space for other companies to to take up Samsung's time, namely other Qualcomm and NVIDIA as TSMC seems to alot most of their resources to serve one customer, namely Apple.
Most of this shuffle wont really affect Samsung in the long run.
It will only hurt Apple as switching costs are fairly high not to mention the yields from TSMC manufacturing base. TSMC has been notorious previously for quality control issues from their chip manufacturing business, namely the NVIDIA GEFORCE chip fiasco. Look it up.
Plus, TSMC doesnt even have enough capacity to produce NVIDIA chips today. How in the heck are they going to produce the A7 ( in sufficient yields and reliability) two years from now? Throwing billions wont cut it as this is a fab we are talking about not some assembly plant.
Samsung is the only manufacturer on the market right now that can deliver guaranteed yields as well as quality. They have proven track record of both. Apple is just butthurt and perhaps in a panic after realizing their lawsuit isnt going quite as planned. Their recent "win" in the California courts? Yeah, that will most likely get a retrial or even thrown out all together. The appeals court will be using the abuse of discretion from Judge Koh's judgement and use it for the appeals case.
Also, last point, if Apple keeps switching suppliers due to personal reasons, their relations with them wont be a good one. Who wants to work with a client who is fickle?
I hope their severing ties with Samsung has a better outcome than the last one they had: Google.
The industry average for semiconductor gross margins is around 65%. Samsung was reported to have margins close to the industry average.
The industry average for mobile phones is quite low - certainly nowhere near 65%. And even that overestimates how much Samsung got by stealing Apple's technology. Arguably, they would have sold a lot of the high end phones, anyway. People who are paying $750 to buy a Galaxy SIII instead of $750 to buy an iPhone probably had some other reason for buying the SIII - so the IP theft may not have helped all that much. OTOH, the "looks just like an iPhone, but hundreds of dollars less" depends directly on their slavish imitation of Apple's products - and helps them to sell mostly low margin phones.
Quote:
Originally Posted by BigMac2
Yep, and Apple ended up snatching all Samsung ARM ressources and bring every aspect of cpu design in-house, leading ARM cpu market ever since.
LOL!! Oh, you mean Intrinsity? Of course, Samsung couldn't have possibly produce its own ARM based chips without it. LOL!! So much for Apple's superior knowledge of the ARM arch..
Quote:
Originally Posted by Crowley
I understand why this has happened, and I don't think the fault lies at Apple's feet to any great degree, but nevertheless it doesn't seem like a good development for the company to have a hateful relationship with anyone. I hope Apple aren't going to take this down the road they did with Microsoft and IBM in the past, rivals are fine to have, but enemies just lead to destructive behaviour that distract from making good products.
Maybe I'm wrong and Apple can tap into this productively and make iPhones and iPads that blow Samsung even further out of the water. But if they cut off their nose to spite their face then we all lose.
You are wrong, but not about what you think you're wrong about.
Are you aware that the terms "love-hate" and "hate-hate" is a purely "food coloring" added by the press? In this case, it's in the English title of the original Korea Times article. AppleInsider for no clear reason distilled the facts by blending that characterization into the body of their re-reported article, perhaps to obfuscate its source, or perhaps for no reason at all. No one from either company uses the terms "love" or "hate" to characterize their business relationship. In fact, both companies declined to comment on the original article. The only fact the article reported was that Apple did not collaborate with Samsung on the development of the A6, using Samsung's manufacturing capability only. And that's followed by "analysts" who start painting their opinion to the facts--BUT STILL NONE OF THEM characterized Apple-Samsung partnership as "hate-hate." Ask yourself this: WHO SAID "HATE"? If you dig hard enough, you'll see that this is a fabrication by whoever came up with the title of the original article.
In other words, facts are boring. Let's dramatize everything, let's use war metaphors, so people will care, they'll hang on every word, they'll post comments and this will cause others to post replies, and this will drive up site engagement! Money from ads! AppleInsider didn't even write the original content! So it's virtually free money!
In general though you are right Apple needs to wake up and smell the coffee. They need their own production plants.
Quote:
Originally Posted by tooltalk
LOL!! Oh, you mean Intrinsity? Of course, Samsung couldn't have possibly produce its own ARM based chips without it. LOL!! So much for Apple's superior knowledge of the ARM arch..
Samsung is not a R&D shop, they are OEM manufacturer, Samsung have not create their ARM design in-house, Intrinsity engineers was the real brains behind Samsung's CPU.
Quote:
Originally Posted by EricTheHalfBee
Way to try and spin off the loss of billions in sales as a non-issue.
Part of the reason Samsung is out front in semiconductors is because of Apple. Samsung wouldn't have money to expand their production and build new lines without someone to buy all their chips. It also reduces their economy of scale which means either higher prices for their other customers or reduced margins on their other sales.
Don't kid yourself, this is bigger than just the loss of a few sales.
ROFL!! Firstly, Apple' share of Samsung Electronic's overall Sales is still less than 8% - and Apple wasn't even Samsung's largest customer until last year (Sony #1). Even if you combine all the sales from Apple last several years, it couldn't still pay for Samsung's capital expenditure for 2012 or $41B. Samsung and other South Korean component makers like Hynix and LG have been well "out in front" in semiconductor/display business since the 90's and it has very little or nothing to do with Apple, which back in the late 90's was on the brink of collapse. Samsung semi's revenue has been flat for years now and could possibly face a few disappointing quarters - after all, nobody, other than Samsung and Toshiba, is really making money in the DRAM/NAND business now; almost everyone in the display business is losing money. But that's the nature of their business; it has little to do with Apple. Samsung mobile can easily make up for the loss in the growing mobile (smartphone) and mobile components business.
Apple #1!! LOL!!
Quote:
Originally Posted by Galbi
Apple is notorious for squeezing their suppliers' profit margins to be hair thin.
I'm always amused by characterizations of free-market B2B contracts, negotiated between two very large corporate entities who are both fully capable of negotiating favorable terms in their own self-interest as big greedy Apple unfairly squeezing the little guy until they're forced to give up profit margins.
You forgot to mention that Apple promised to kill a newborn Labrador Retriever puppy for every $1000 in profit Samsung makes.