HTC next to accuse Samsung of using component supplies as a "competitive weapon"

Posted:
in iPhone edited January 2014
Apple isn't the only company grappling with its relationship to Samsung as both a smartphone component supplier and handset competitor. HTC recently complained that Samsung has "strategically declined" to provide it with crucial parts for years.

A report by Focus Taiwan cited Jack Tong, the president of HTC North Asia, giving an example of Samsung exploiting its needs as a component customers in order to sabotage HTC's smartphone operations and disrupt its sales.HTC: "We found that key component supply can be used as a competitive weapon."

Tong noted that after HTC had developed its Desire phone using an Samsung AMOLED screen in 2010, as soon as its sales began taking off Samsung "strategically declined" to fill orders for the critical component, forcing HTC to redesign its product.

HTC's Desire won the "Highly Commended" award at the 2011 Mobile World Congress, with judges noting it "set the bar for Android phones across much of the world in 2010," making it a clear target for Samsung.

"We found that key component supply can be used as a competitive weapon," Tong said.

Taiwan declares war on Korea

In response, HTC has worked with Taiwan's Ministry of Economic Affairs to develop a local supply chain, both to ensure component availability and to lower costs for domestic manufacturers in the country. The Ministry is also working with Acer and Asustek (a firm Apple used to build the original iBook and MacBooks) to recruit foreign companies to develop display and other component production in Taiwan.

Taiwan's Fair Trade Commission has already launched an inquiry into Samsung's business practices following reports that the company paid people to disparage other brands online using social networks.

Samsung was also reported to have launched an internal "Kill Taiwan" campaign, which has helped to strengthen relationships between Apple and Taiwan, particularly Taiwan Semiconductor Manufacturing Co., which Apple is investing billions into in order to shift its ARM processor fabrication orders away from Samsung.

TSMC

Samsung suffers blowback after weaponizing its component supply

Apple has similarly taken steps to shift production and component orders away from Samsung, but the company remains one of Apple's largest (if not the largest) suppliers for displays, memory, processor fabrication and other components, primarily because Samsung has invested billions in developing a vast component production facilities.

Unlike smaller companies like HTC, Apple has long had the capital to sign long term contracts, limiting its exposure to Samsung's supply shenanigans. However, the tight vertical integration within the massive Samsung Electronics conglomerate has also meant that Apple's confidential orders with Samsung's semiconductor group were illicitly shared within the company as part of Samsung's weaponizing its component relationships.

Samsung's U.S. patent trial exposed how the company leveraged its tight relationship with Apple to develop its counterfeit Galaxy brand in 2010, beginning with an intense, three month cloning effort to steal Apple's trademarks, patented designs and other technologies in the iPhone 3GS.

Samsung Galaxy iPhone


Samsung is only beginning to see the downside of competing against its best customers, with Apple's Galaxy case still dragging through the courts three years later, Apple's own efforts to leave Samsung progressing slowly, and replacement supplier efforts like Apple's TSMC ARM chip plans and those of the Taiwan government just beginning to get started.

The company has scrambled to improve its image however, with executives meeting last fall in an emergency session to construct the notion of a "strict internal firewall" that ostensibly protects its customers' strategic, confidential orders and other information from other parts of Samsung that directly compete against those same customers.

In addition to Apple, HTC and other companies in Taiwan, Nokia is also rumored to working distance itself from Samsung. A source familiar with the situation told AppleInsider that Samsung has "a record of getting orders for next-gen components, then canceling the orders. And then they show up in a Samsung phone."

Google needs Samsung to keep Android relevant

Google has attempted to keep peace within the Android ecosystem, partnering with both HTC and Samsung to develop Nexus branded devices. It even paid an astronomical $12.5 billion to acquire Motorola, largely to prevent the company from starting a patent war with other Android licensees, including Samsung.

Samsung's conduct is particularly interesting because it is now the only really successful Android licensee. However, Samsung also increasingly relies upon its own Galaxy brand rather than promoting Android as a platform.

The company has recently put its resources behind Tizen, an independent Linux project formed with Intel that Samsung could use to marginalize Android into being nothing more than a hobbyist platform leveraged by cheap phone makers for overseas markets that don't even use Google services or its Play store.

Without Samsung, Android would be virtually worthless to Google.
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Comments

  • Reply 1 of 38


    This is what you get when you rely on companies whose executives are corrupted and full of scandals!

     

  • Reply 2 of 38
    tokyojimutokyojimu Posts: 338member
    Hello, proofreaders! Where are you???

    Not to mention overly sensationalist sub-headings.
  • Reply 3 of 38
    jungmarkjungmark Posts: 6,507member
    Sammy would never do anything this sleazy. /s

    Anti trust issues in Korea? Nothing a few bribes can't cure.
  • Reply 4 of 38
    tallest skiltallest skil Posts: 42,837member


    Originally Posted by TokyoJimu View Post

    Hello, proofreaders! Where are you???


     


    "Out too launch."

  • Reply 5 of 38
    jobsisgodjobsisgod Posts: 31member


    Scamsung is being douchey to a competitor?  I for one am shocked to hear this, lol.


     


    I hope they go under soon.

  • Reply 6 of 38
    r00fusr00fus Posts: 245member
    Of course - they don't dare complain about Google's sleeping with Samsung a lot more than it does with the other manufacturers in it's "harem" - if I were HTC I'd be royally pissed about the "google" S4 and that valuable keynote advert/shoutout.

    The Android hardware scene looks pretty unstable with the 800 lb Samsung in the room.

    Is Google/Samsung going to become WinTel all over again?
  • Reply 7 of 38
    loptimistloptimist Posts: 113member
    Interesting how this article has to be on Appleinsider. The author tries to find some relevancy to Apple and tries so hard to make some but it is only tangential.

    Anyhow HTC is just whining about it. Unless they can prove they offered better terms to Samsung than Apple or Nokia or Samsung's mobile division, they will just lose.

    It is just how market runs.
  • Reply 8 of 38
    jack99jack99 Posts: 157member

    Quote:

    Originally Posted by TokyoJimu View Post



    Hello, proofreaders! Where are you???



    Not to mention overly sensationalist sub-headings.


     


     


    "Suffers Blowback?" "counterfeit Galaxy brand?"


     


     


    Hmmmm. Kind of hard to take a source too seriously if it's misrepresenting events or if its diction is dripping with this much bias. 


     


     


    Then again, the author probably knows his audience pretty well and is just feeding into their emotional attachments. image

  • Reply 9 of 38
    jack99jack99 Posts: 157member

    Quote:

    Originally Posted by Loptimist View Post



    Interesting how this article has to be on Appleinsider. The author tries to find some relevancy to Apple and tries so hard to make some but it is only tangential.



    Anyhow HTC is just whining about it. Unless they can prove they offered better terms to Samsung than Apple or Nokia or Samsung's mobile division, they will just lose.



    It is just how market runs.


     


     


    Even then, Samsung isn't under any legal obligation to do business with other companies, let alone competitors like HTC. I've had wannabe lawyers try to claim there's an antitrust issue when Samsung becomes selective about who can buy its AMOLED panels. Funny how asking for the legal authority to support this claim can produce so much grumbling and denial


     


    As other OLED manufacturers scale up production over the next few years, I don't see this being much of an issue anyway. The race is no longer to develop small AMOLED panels cost efficiently. That was done years ago. It's now to get an AMOLED TV into the consumer market soon. 

  • Reply 10 of 38
    jobsisgodjobsisgod Posts: 31member

    Quote:

    Originally Posted by Jack99 View Post


     


     


    "Suffers Blowback?" "counterfeit Galaxy brand?"


     


     


    Hmmmm. Kind of hard to take a source too seriously if it's misrepresenting events or if its diction is dripping with this much bias. 


     


     


    Then again, the author probably knows his audience pretty well and is just feeding into their emotional attachments. image



     




    If you don't like reading facts I'm sure there are other sources for news that you may like better.

  • Reply 11 of 38
    dasanman69dasanman69 Posts: 12,926member
    "Out too launch."

    Do they work at NASA?
  • Reply 12 of 38
    SpamSandwichSpamSandwich Posts: 28,794member

    Quote:

    Originally Posted by dasanman69 View Post





    Do they work at NASA?


     


    One out of three words spelled correctly ain't bad. image

  • Reply 13 of 38
    jack99jack99 Posts: 157member

    Quote:

    Originally Posted by jobsisgod View Post


     




    If you don't like reading facts I'm sure there are other sources for news that you may like better.



     


    There are facts, and then there are embellishments which in reality are merely opinions. All I did was point out a couple of areas that would lead a reasonable person to recognize the author has some bias. 


     


     


    Bias=/=facts--but you knew that, right? Hopefully? 


     


     


    If you don't like reading an objective assessment of the article, I'm sure there are other sources of news you may prefer that don't contain it. image

  • Reply 14 of 38
    tallest skiltallest skil Posts: 42,837member


    Originally Posted by SpamSandwich View Post

    One out of three words spelled correctly ain't bad. image


     


    That's Yahoo!'s motto since buying Tumblr and Flickr.

  • Reply 15 of 38
    loptimistloptimist Posts: 113member
    jack99 wrote: »

    Even then, Samsung isn't under any legal obligation to do business with other companies, let alone competitors like HTC. I've had wannabe lawyers try to claim there's an antitrust issue when Samsung becomes selective about who can buy its AMOLED panels. Funny how asking for the legal authority to support this claim can produce so much grumbling and denial

    As other OLED manufacturers scale up production over the next few years, I don't see this being much of an issue anyway. The race is no longer to develop small AMOLED panels cost efficiently. That was done years ago. It's now to get an AMOLED TV into the consumer market soon. 

    I wasnt suggesting sufficiency of their claim by proving just that. If I confused you I apologize.
  • Reply 16 of 38
    jack99jack99 Posts: 157member

    Quote:

    Originally Posted by Jack99 View Post


     


     


    Even then, Samsung isn't under any legal obligation to do business with other companies, let alone competitors like HTC. I've had wannabe lawyers try to claim there's an antitrust issue when Samsung becomes selective about who can buy its AMOLED panels. Funny how asking for the legal authority to support this claim can produce so much grumbling and denial


     


    As other OLED manufacturers scale up production over the next few years, I don't see this being much of an issue anyway. The race is no longer to develop small AMOLED panels cost efficiently. That was done years ago. It's now to get an AMOLED TV into the consumer market soon. 



     


    Quote:

    Originally Posted by Loptimist View Post





    I wasnt suggesting sufficiency of their claim by proving just that. If I confused you I apologize.


     


     


    Bah, I was actually agreeing with you and adding another reason why their complaints have been largely baseless.

  • Reply 17 of 38
    jobsisgodjobsisgod Posts: 31member

    Quote:

    Originally Posted by Jack99 View Post


     


    There are facts, and then there are embellishments which in reality are merely opinions. All I did was point out a couple of areas that would lead a reasonable person to recognize the author has some bias. 


     


     


    Bias=/=facts--but you knew that, right? Hopefully? 


     


     


    If you don't like reading an objective assessment of the article, I'm sure there are other sources of news you may prefer that don't contain it. image



     


    Stop being a dimwit.  Don't you have other places you could troll?

  • Reply 18 of 38
    jack99jack99 Posts: 157member

    Quote:

    Originally Posted by jobsisgod View Post


     


    Stop being a dimwit.  Don't you have other places you could troll?



     


     


    I'm sorry, was there anything factually wrong in what I said? Wouldn't you agree I've been correct in my posts in this thread thus far? I didn't mean to come off as a troll, although going back, I can see why anyone would interpret my first post as a trolly statement. I was just making a point that the author probably shouldn't get the full brunt of the blame for how the article was fashioned. He's just writing to a specific audience. That's not even a journalistic skill, that's just a basic English essay writing rule we all learn in freshman year of high school.


     


    If you're offended by what I've said so far, the problem lies with you, and not with me.

  • Reply 19 of 38
    gtrgtr Posts: 3,230member
    jack99 wrote: »
    I'm sorry, was there anything factually wrong in what I said? Wouldn't you agree I've been correct in my posts in this thread thus far? I didn't mean to come off as a troll, although going back, I can see why anyone would interpret my first post as a trolly statement. I was just making a point that the author probably shouldn't get the full brunt of the blame for how the article was fashioned. He's just writing to a specific audience. That's not even a journalistic skill, that's just a basic English essay writing rule we all learn in freshman year of high school.

    If you're offended by what I've said so far, the problem lies with you, and not with me.

    So you're claiming that the article is not actually factually correct and just written to get an emotional response from a particular audience, and Samsung have never, ever been guilty of illegal behaviour?

    On a regular basis.

    And been charged for it.

    Statements like that will get you sued by Apple once they learn that you've stolen their reality distortion field.
  • Reply 20 of 38
    geekdadgeekdad Posts: 1,130member


    HTC and others should just not buy from Samsung.....problem solved....

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