This is probably why Samsung recently spun off its display business into a seperate company, so as to maintain its contracts with Apple whilst avoiding any further conflict of interest. Personally I'm glad they are using one supplier. At least if you buy an iPad 3 you know you're getting the best quality display, rather than wondering if you've ended up with a slightly inferior LG display version.
Yup, I for one am more then happy that Samsung is making the screen for Apple. They are the only manufacture that I buy my TV's and monitors from. Their display quality is bar non the best in the world. Have you seen a SAMOLED display, f*ck me their awesome. My Samsung Note and Galaxy 7.7 both have one and I just count the days when I can have a 42" version for my wall.
Apple could do no better. Though NEC is also making some real strides in their display technology.
Yup, I for one am more then happy that Samsung is making the screen for Apple. They are the only manufacture that I buy my TV's and monitors from. Their display quality is bar non the best in the world. Have you seen a SAMOLED display, f*ck me their awesome. My Samsung Note and Galaxy 7.7 both have one and I just count the days when I can have a 42" version for my wall.
Apple could do no better. Though NEC is also making some real strides in their display technology.
Which is the better display Retina or Super AMOLED?
Which is the better display Retina or Super AMOLED?
Their both wonderful. Wait till Samsung releases their high resolution screen to make a comparison. I'm sure it will happen in the next two months. What I can say with certainty though is the Samsung display will most likely have the better color display. SAMOLED is so mind blowing good that it's hard to believe something is better then it. Even another screen technology that was designed by Apple and manufactured by Samsung.
I think the first iteration of the Retna for larger screens will be more about the resolution then color accuracy. Will have to wait a week or two to find out though mainstream revues.
The funniest thing of all is that even if we ignore his mistake about mixing up Samsung and Samsung Electronics, Apple is nowhere near the biggest customer.
The information I've seen is that Sony buys 50% more from SE than Apple.
But why let facts get in the way of a good fanboi shibboleth?
Here, you miserable FUD-monger, are your shorts to eat:
Apple should just stop pretending it's technically innovative and just outsource the entire manufacturing to Samsung / sign non-compete / throw billions at Samsung like Dell did in the 90's.
Note that supplier means manufacturer, not the inventor or creator of the display panel. There role as supplier is much like Foxconn is to building iPhone... though considerably more automated.
Solipsismx.. gosh.. where do we begin.. son..?
This quote is almost as foul as Engadget morons that claim "iPad 3 sucks." "iPad 3 has very minimal upgrades."
If we're talking product integration, simplistic yet appealing product design, user interface... Apple is the king. No question.
If you moron are talking about pure technology development and specs... companies like Samsung take the cake.
Apple simply cannot compete on specs alone
when companies like Samsung developed and perfected features like high quality screens and numerous communication technology (and many others) that APPLE IS ENORMOUSLY BENEFITING FROM and claiming as their own INVENTION.
Apple can't make your favourite iPhone without depending on technology developed and perfected by companies like Samsung.
I'm just not a fan of Apple Sh*theads that believe Apple "invented" tablets, "created" touch screen technology, "magically made Samsung come up with extremely hi-res screens, flash HD et ceterea."
Apple, the company is amazing at putting all the pieces together but they are NOT inventors.
LG likely designed the panels with Apple's backing. Apple likely has exclusive rights as the 326 PPI IPS panels used in the iPhone 4 finally appeared in an LG phone in January 2012, so that was about an 18 month exclusivity.
Before that actually... The LG Optimus/Nitro/Spectrum LTE was first released in Oct 2011.
And Apple does have exclusive rights to the 960x640 3.5" IPS display, not necessarily to a certain 'DPI' measurement.
And display companies have been working on high DPI displays for awhile, it just hasn't been economically viable until recently. Even 300+ DPI isn't entirely necessary IMO, it really depends on intended viewing distance.
But Samsung relies on Android for the functionality of it. And they'll do a lot of Windows as well in the future. They have Bada but does anyone really believe they'll ditch Android for it? Samsung also has no real ecosystem of their own to speak of. They're totally dependent on Google on the software side of things and they're not very happy about that.
They won't ditch Android for Bada but if they needed to they could. Bada is a very technically sound operating system (and actually quite similar to iOS - Unix based, no Java, native apps). More likely is that Samsung will merge Bada with Tizen, and introduce that as an alternative. Windows Phone is a massive failure, and likely will continue to be. Still no dual-core support on WP7, for instance...
Quote:
Originally Posted by alexkhan2000
Vertical integration in electronics manufacturing is way more trouble than it's worth and offers very little flexibility. But Apple's vertical integration in terms of design, engineering, procurement, assembly, software (especially the OS), content (iTunes), and services (iCloud) all the way through retail is something no one else can match and why Apple has a net margin of 28%. Samsung's net margins isn't even near the ballpark.
No, Samsung can't match Apple in margins, but they don't need to. Samsung employees still get paid, they still make a ton of profit, even if they need to have 2.5 times the revenue of Apple to acomplish it.
Samsung also does more for the world of technology than Apple (by creating 'enabling' technologies), Apple is just great at putting the pieces together into a great consumer product. Apple is more about the 'user experience' and finished product, Samsung is about technology and manufacturing.
While it's awkward, I wouldn't worry too much. Manufacturing contracts are usually very explicit. If the manufacturer breaks the contract they're liable for giant sums of cash (i.e. hundreds of billions). And the contract is usually in the jurisdiction of the customer, i.e. Apple in the US.
While Samsung and Apple maybe duking it out, Samsung wouldn't break the contract. It would be the end of them in the US.
Apple and Samsumg are big boys. Samsung wont say not to their biggest customer and Apple wont comprimise on quality.
Neither will let their patent battles get in the way of doing buisiness.
This. Several months ago, I posted that it would be completely stupid for Apple to switch suppliers and potentially compromise quality and cost competitiveness just because of the ongoing legal battles. The exception would be if LG and Sharp could truly deliver, and I was skeptical about Sharp and LG's ability to churn out a high number of displays at high yields. AFAIK, Samsung is one of few companies that has consistently shown the ability to do exactly that. Especially with Samsung potentially spinning off their display business, it doesn't make sense for Apple to suddenly put a slower horse into the horserace.
Smart play on Apple's part. Pragmatism won out at the end of the day.
And Samsung's bottom line wouldn't suffer if Apple did do business with them? Just because there is a rumour that Samsung is Apple's best option that doesn't mean it's their only option. They might have to pay more per display due to more rejects or from hiring out more factories or building their own but we're talking about production here.
Your argument is like saying "Apple would be up the creek without a paddle if it weren't for Foxccon" or "...inexpensive Chinese labour." or any number of things that effect the industry. In the end Apple will get their products made some how and Samsung will get customers. This is commerce not HS.
Except Samsung has numerous businesses that do not depend on Apple. Samsung Electronics is the tip of the surface when you look at the other lines of business that also bring the conglomerate enormous profits. Even if you concentrate on Samsung Electronics only, Apple constitutes anywhere between 11-15% of Samsung's components business. Not exactly enough to make them go under when you think about it.
You mean, iPad = Samsung Device + Apple Sticker + Slave Labour + Mansion Payments to Executives
That's actually not true. There is no slave labor here. None of those people are being forced to work at those factories against their will...and they just got a pay raise if you had been following the news. I really don't care what the executives make as long as they pay their fair share of taxes and the shareholders don't mind giving their life savings to Apple execs.
Operating "autonomously" or not, all of the business operations are consolidated on a single financial statement at the end of each quarter. Each divisions dont generate their own financial statements. It all gets combined together under Samsung Electronics.
The ironic thing about this business relationship is that one side is suing the living crap out of each other while the other side in the business realm, they are a cozy couple.
Foxconn doesnt produce their own goods but goods of others. But I understand your point. In fact, Samsung is starting to venture into the contract manufacturing semiconductor business as an additional revenue source for them.
That's true about one financial statement under Samsung Electronics but the semiconductor and display divisions are the pillar of the company. They don't have the surface glamour of its TV and mobile divisions that market its own branded products but these divisions are the like the engine that keeps the overall Samsung machine rolling.
The relationship between Apple and Samsung is very interesting, almost fascinating. As antagonistic as they are on the mobile front, they are as cozy on the supplier-customer front in which both sides benefit handsomely from the relationship.
Quote:
Originally Posted by Galbi
Apple's net margins are higher only because they have very little to no fix costs in their balance sheet. On the other hand, Samsung, with its many, many factories and research centers situated around the globe, have lots of fixed cost infrastructures. Therefore, the net margins are much smaller. Take away all those fixed costs and Samsung's net margins will shoot up drastically.
Why doesnt Samsung get rid of all those fixed costs and outsource them? Secrecy is one reason, quality control, flexibility to create new product categories, influence the market by being a formidable player (LCD)...basically setting industry standards (screen sizes) and others.
I'm surprised that a company like Apple, who regards its corporate secrets as one of its top priorities, delegates the manufacturing of its core products to a third party source 3000 miles away in a communist country China and expect no one to leak product details. Doesnt that seem counter intuitive to what their goal is? If they want to keep their secret they should have full control of the production of their products and own the plants no? This just leaves me to one conclusion: cheap cost and thus profit margin.
Apple focuses on what it does best and manufacturing is not one of them. What name brand consumer electronics companies based in the US or Japan or Europe have vertically integrated manufacturing for PC's and mobile devices? There's a very good reason why electronics manufacturing has prospered in East Asia and it's not just the cheap labor as some people like to claim. Generally speaking, the work force is relatively well educated (especially in math), disciplined, and very diligent. And, of course, there is also the scale factor with the sheer size and density of population in countries like Japan, Korea and China.
There is just no way an electronics manufacturing base like the one in Asia could have developed in America over the past two decades. There are macro socio-economic factors at play here on a global scale and that's why things are the way they are. Apple survived due to many things in the late-90's that Jobs did when he returned but the one thing that often gets overlooked is that he shut down all of Apple's factories (as well as product lines and warehouses) in the US and outsourced the manufacturing. If he hadn't done that Apple would not have survived when they were mere months away from bankruptcy.
Horace Dediu at Asymco (a truly superb tech industry analysis site with a heavy focus on Apple) once suggested that Apple should build their own manufacturing bases in China or other cheap labor sources around the world. It's an interesting idea but I don't think it would work. It's just not where Apple's core competency lies and Apple would lose the flexibility once they have to manage the realities of running huge factories of hundreds of thousands of employees in a foreign country. What Apple has now works and works very well, so why would they want to mess with it? A factory can become a major albatross around the neck of a company that needs to move with speed and agility.
On one hand, Apple and Samsung have a very complementary relationship because the two companies' cultures and business models could hardly be more different in the same industry. As much as I abhor Samsung's shameless copying of Apple's ideas I have to hand it to Samsung as a world class technology company. Samsung has thoroughly vanquished the likes of Sony, Panasonic and other Japanese electronics companies that it was once decades behind on. Samsung knows what it's doing and they're very good at it.
As a Korean-American who lived most of my youth there and still visit on a regular basis, I really don't like the inordinate amount of power, wealth and influence the family-controlled chaebol conglomerates like Samsung, LG and Hyundai wield on the economy and society of Korea. These companies act and operate like military kingdoms hellbent on conquest of anything and everything. Why does Samsung dabble in everything from selling life insurance to building apartment complexes and from building rice cookers to huge oil tankers?
The sprawl of these conglomerates is just absurd. They grew unchecked during the authoritarian rule of President Park Chung-Hee in the 60's and 70's with generous subsidies from a government that was only interested in exporting as many goods as possible at the cheapest possible prices. Now these conglomerates are so deeply entrenched that the government is almost powerless to stop them. Trust me; a lot of the Korean populace do not like these conglomerates at all but at the same time, they sure wish their kids can get employed there.
What would be really good for the Korean economy is to break up these humungous monolithic conglomerates and set each of their business divisions free to compete in a more nimble and innovative manner instead of reporting their business results every quarter to the almighty chairman and hope he is satisfied with the results. They aren't driven to develop and produce truly great products; they're more concerned about getting their chops busted by their superiors in a huge pyramid-like structure.
Sure, that kind of thing exists in Apple as well and many other large companies but the way the typical Korean conglomerate works is enforced through a rigid seniority system and culture of intimidation. A friend of mine who works at Hyundai's department store division told me that once the chairman was visiting their building. There were sirens going off in the building shouting: "The Chairman is coming! The Chairman is coming!" The office workers had to line up the hallways like honor guards and bow down as the Chairman and his contingent strolled by. I mean, yeah, this kind of stuff still exists in Korea. Samsung is very similar with strict suit-and-tie dress codes and military-like hierarchy and formalities.
Anyway, you can see why these types of companies are very good at manufacturing and not so good at coming up with their own creative ideas. Apple will leave the manufacturing to the ones who are good at it and focus on what they do best.
Samsung Electronics is the tip of the surface when you look at the other lines of business that also bring the conglomerate enormous profits.
This is not true. Samsung Electronics makes up the majority of the revenue of the Samsung Group conglomerate. Out of Samsung Group's $220 billion in revenues in 2010, $134 billion was generated by Samsung Electronics. Apple will surpass Samsung Electronics' revenue in the coming year and Samsung Group's revenue in 2014. Samsung Group's other businesses combined aren't half as profitable as the Electronics company.
AlexKhan, thanks for another dose of realism here. I wonder about the reasons behind Samsung's spinning off of the LCD display division, which was said to be losing money, nearly a billion in one year (?).
Do they wish to hand it off to mainly serve Apple and others resisting OLEDs, and so moot the competition perception, or is it strictly an economic move?
Whichever, one has to assume that Apple had to bankroll, if not assist in process engineering, the large-scale outlay of this previously dormant or modestly endowed new technology—large SHA screens at tremendous volume. I doubt the process engineering part, but they, Apple, seem to be claiming that in the PR about the screen here, under "Breakthrough Engineering:"
AlexKhan, thanks for another dose of realism here. I wonder about the reasons behind Samsung's spinning off of the LCD display division, which was said to be losing money, nearly a billion in one year (?).
Do they wish to hand it off to mainly serve Apple and others resisting OLEDs, and so moot the competition perception, or is it strictly an economic move?
Whichever, one has to assume that Apple had to bankroll, if not assist in process engineering, the large-scale outlay of this previously dormant or modestly endowed new technology—large SHA screens at tremendous volume. I doubt the process engineering part, but they, Apple, seem to be claiming that in the PR about the screen here, under "Breakthrough Engineering:"
It seems this is more of a strategic business move to accommodate a shift in display technologies for the future. You notice that this spun-off company will still be called Samsung and be a wholly owned subsidiary of the Samsung Group. To me, it looks like a reorganization move to make the business more nimble and competitive and not be bound under the huge Samsung Electronics umbrella.
Samsung has to be worrying about the rise of new electronics giants in China. Samsung isn't the Chinese army it used to be and must adapt to the changing market dynamics in the electronics manufacturing sector. Samsung won't be able to compete with the likes of China's Haier Group and Huawei in the future strictly based on price. Samsung has to move upstream as purveyor of their own branded products in consumer electronics and guess who's standing in their way?
I'm not too familiar with the global display business in general. Components' side of things don't interest me too much. It just seems that Samsung is feeling the pressure of new electronics giants emerging in China. The LCD has become commoditized and, as we all know, commodities aren't fun for manufacturers.
Apple, the company is amazing at putting all the pieces together but they are NOT inventors.
So now another asshat comment saying Apple doesn't invent anything. You want to tell us all their R&D and patents are just for marketing?
Again, Samsung producing the displays is as much proof that Samsung invented the display tech as Foxconn manufacturing the iPhone is proof that Foxconn designed the iPhone. As previously noted this is right up LG's street, not Sharp or Samsung.
Comments
This is probably why Samsung recently spun off its display business into a seperate company, so as to maintain its contracts with Apple whilst avoiding any further conflict of interest. Personally I'm glad they are using one supplier. At least if you buy an iPad 3 you know you're getting the best quality display, rather than wondering if you've ended up with a slightly inferior LG display version.
Yup, I for one am more then happy that Samsung is making the screen for Apple. They are the only manufacture that I buy my TV's and monitors from. Their display quality is bar non the best in the world. Have you seen a SAMOLED display, f*ck me their awesome. My Samsung Note and Galaxy 7.7 both have one and I just count the days when I can have a 42" version for my wall.
Apple could do no better. Though NEC is also making some real strides in their display technology.
Yup, I for one am more then happy that Samsung is making the screen for Apple. They are the only manufacture that I buy my TV's and monitors from. Their display quality is bar non the best in the world. Have you seen a SAMOLED display, f*ck me their awesome. My Samsung Note and Galaxy 7.7 both have one and I just count the days when I can have a 42" version for my wall.
Apple could do no better. Though NEC is also making some real strides in their display technology.
Which is the better display Retina or Super AMOLED?
So basically
iPad = Samsung Device + Apple Sticker
You mean, iPad = Samsung Device + Apple Sticker + Slave Labour + Mansion Payments to Executives
Which is the better display Retina or Super AMOLED?
Their both wonderful. Wait till Samsung releases their high resolution screen to make a comparison. I'm sure it will happen in the next two months. What I can say with certainty though is the Samsung display will most likely have the better color display. SAMOLED is so mind blowing good that it's hard to believe something is better then it. Even another screen technology that was designed by Apple and manufactured by Samsung.
I think the first iteration of the Retna for larger screens will be more about the resolution then color accuracy. Will have to wait a week or two to find out though mainstream revues.
The funniest thing of all is that even if we ignore his mistake about mixing up Samsung and Samsung Electronics, Apple is nowhere near the biggest customer.
The information I've seen is that Sony buys 50% more from SE than Apple.
But why let facts get in the way of a good fanboi shibboleth?
Here, you miserable FUD-monger, are your shorts to eat:
http://www.macrumors.com/2011/02/14/...-in-contracts/
A one-second search.
So basically
iPad = Samsung Device + Apple Sticker
Apple should just stop pretending it's technically innovative and just outsource the entire manufacturing to Samsung / sign non-compete / throw billions at Samsung like Dell did in the 90's.
Note that supplier means manufacturer, not the inventor or creator of the display panel. There role as supplier is much like Foxconn is to building iPhone... though considerably more automated.
Solipsismx.. gosh.. where do we begin.. son..?
This quote is almost as foul as Engadget morons that claim "iPad 3 sucks." "iPad 3 has very minimal upgrades."
If we're talking product integration, simplistic yet appealing product design, user interface... Apple is the king. No question.
If you moron are talking about pure technology development and specs... companies like Samsung take the cake.
Apple simply cannot compete on specs alone
when companies like Samsung developed and perfected features like high quality screens and numerous communication technology (and many others) that APPLE IS ENORMOUSLY BENEFITING FROM and claiming as their own INVENTION.
Apple can't make your favourite iPhone without depending on technology developed and perfected by companies like Samsung.
I'm just not a fan of Apple Sh*theads that believe Apple "invented" tablets, "created" touch screen technology, "magically made Samsung come up with extremely hi-res screens, flash HD et ceterea."
Apple, the company is amazing at putting all the pieces together but they are NOT inventors.
LG likely designed the panels with Apple's backing. Apple likely has exclusive rights as the 326 PPI IPS panels used in the iPhone 4 finally appeared in an LG phone in January 2012, so that was about an 18 month exclusivity.
Before that actually... The LG Optimus/Nitro/Spectrum LTE was first released in Oct 2011.
And Apple does have exclusive rights to the 960x640 3.5" IPS display, not necessarily to a certain 'DPI' measurement.
And display companies have been working on high DPI displays for awhile, it just hasn't been economically viable until recently. Even 300+ DPI isn't entirely necessary IMO, it really depends on intended viewing distance.
But Samsung relies on Android for the functionality of it. And they'll do a lot of Windows as well in the future. They have Bada but does anyone really believe they'll ditch Android for it? Samsung also has no real ecosystem of their own to speak of. They're totally dependent on Google on the software side of things and they're not very happy about that.
They won't ditch Android for Bada but if they needed to they could. Bada is a very technically sound operating system (and actually quite similar to iOS - Unix based, no Java, native apps). More likely is that Samsung will merge Bada with Tizen, and introduce that as an alternative. Windows Phone is a massive failure, and likely will continue to be. Still no dual-core support on WP7, for instance...
Vertical integration in electronics manufacturing is way more trouble than it's worth and offers very little flexibility. But Apple's vertical integration in terms of design, engineering, procurement, assembly, software (especially the OS), content (iTunes), and services (iCloud) all the way through retail is something no one else can match and why Apple has a net margin of 28%. Samsung's net margins isn't even near the ballpark.
No, Samsung can't match Apple in margins, but they don't need to. Samsung employees still get paid, they still make a ton of profit, even if they need to have 2.5 times the revenue of Apple to acomplish it.
Samsung also does more for the world of technology than Apple (by creating 'enabling' technologies), Apple is just great at putting the pieces together into a great consumer product. Apple is more about the 'user experience' and finished product, Samsung is about technology and manufacturing.
While Samsung and Apple maybe duking it out, Samsung wouldn't break the contract. It would be the end of them in the US.
Why?
Apple and Samsumg are big boys. Samsung wont say not to their biggest customer and Apple wont comprimise on quality.
Neither will let their patent battles get in the way of doing buisiness.
This. Several months ago, I posted that it would be completely stupid for Apple to switch suppliers and potentially compromise quality and cost competitiveness just because of the ongoing legal battles. The exception would be if LG and Sharp could truly deliver, and I was skeptical about Sharp and LG's ability to churn out a high number of displays at high yields. AFAIK, Samsung is one of few companies that has consistently shown the ability to do exactly that. Especially with Samsung potentially spinning off their display business, it doesn't make sense for Apple to suddenly put a slower horse into the horserace.
Smart play on Apple's part. Pragmatism won out at the end of the day.
And Samsung's bottom line wouldn't suffer if Apple did do business with them? Just because there is a rumour that Samsung is Apple's best option that doesn't mean it's their only option. They might have to pay more per display due to more rejects or from hiring out more factories or building their own but we're talking about production here.
Your argument is like saying "Apple would be up the creek without a paddle if it weren't for Foxccon" or "...inexpensive Chinese labour." or any number of things that effect the industry. In the end Apple will get their products made some how and Samsung will get customers. This is commerce not HS.
Except Samsung has numerous businesses that do not depend on Apple. Samsung Electronics is the tip of the surface when you look at the other lines of business that also bring the conglomerate enormous profits. Even if you concentrate on Samsung Electronics only, Apple constitutes anywhere between 11-15% of Samsung's components business. Not exactly enough to make them go under when you think about it.
You mean, iPad = Samsung Device + Apple Sticker + Slave Labour + Mansion Payments to Executives
That's actually not true. There is no slave labor here. None of those people are being forced to work at those factories against their will...and they just got a pay raise if you had been following the news. I really don't care what the executives make as long as they pay their fair share of taxes and the shareholders don't mind giving their life savings to Apple execs.
iPad = Samsung Device + Apple Sticker
here, you miserable fud-monger, are your shorts to eat:
http://www.macrumors.com/2011/02/14/...-in-contracts/
a one-second search.
#troll fail!
Operating "autonomously" or not, all of the business operations are consolidated on a single financial statement at the end of each quarter. Each divisions dont generate their own financial statements. It all gets combined together under Samsung Electronics.
The ironic thing about this business relationship is that one side is suing the living crap out of each other while the other side in the business realm, they are a cozy couple.
Foxconn doesnt produce their own goods but goods of others. But I understand your point. In fact, Samsung is starting to venture into the contract manufacturing semiconductor business as an additional revenue source for them.
That's true about one financial statement under Samsung Electronics but the semiconductor and display divisions are the pillar of the company. They don't have the surface glamour of its TV and mobile divisions that market its own branded products but these divisions are the like the engine that keeps the overall Samsung machine rolling.
The relationship between Apple and Samsung is very interesting, almost fascinating. As antagonistic as they are on the mobile front, they are as cozy on the supplier-customer front in which both sides benefit handsomely from the relationship.
Apple's net margins are higher only because they have very little to no fix costs in their balance sheet. On the other hand, Samsung, with its many, many factories and research centers situated around the globe, have lots of fixed cost infrastructures. Therefore, the net margins are much smaller. Take away all those fixed costs and Samsung's net margins will shoot up drastically.
Why doesnt Samsung get rid of all those fixed costs and outsource them? Secrecy is one reason, quality control, flexibility to create new product categories, influence the market by being a formidable player (LCD)...basically setting industry standards (screen sizes) and others.
I'm surprised that a company like Apple, who regards its corporate secrets as one of its top priorities, delegates the manufacturing of its core products to a third party source 3000 miles away in a communist country China and expect no one to leak product details. Doesnt that seem counter intuitive to what their goal is? If they want to keep their secret they should have full control of the production of their products and own the plants no? This just leaves me to one conclusion: cheap cost and thus profit margin.
Apple focuses on what it does best and manufacturing is not one of them. What name brand consumer electronics companies based in the US or Japan or Europe have vertically integrated manufacturing for PC's and mobile devices? There's a very good reason why electronics manufacturing has prospered in East Asia and it's not just the cheap labor as some people like to claim. Generally speaking, the work force is relatively well educated (especially in math), disciplined, and very diligent. And, of course, there is also the scale factor with the sheer size and density of population in countries like Japan, Korea and China.
There is just no way an electronics manufacturing base like the one in Asia could have developed in America over the past two decades. There are macro socio-economic factors at play here on a global scale and that's why things are the way they are. Apple survived due to many things in the late-90's that Jobs did when he returned but the one thing that often gets overlooked is that he shut down all of Apple's factories (as well as product lines and warehouses) in the US and outsourced the manufacturing. If he hadn't done that Apple would not have survived when they were mere months away from bankruptcy.
Horace Dediu at Asymco (a truly superb tech industry analysis site with a heavy focus on Apple) once suggested that Apple should build their own manufacturing bases in China or other cheap labor sources around the world. It's an interesting idea but I don't think it would work. It's just not where Apple's core competency lies and Apple would lose the flexibility once they have to manage the realities of running huge factories of hundreds of thousands of employees in a foreign country. What Apple has now works and works very well, so why would they want to mess with it? A factory can become a major albatross around the neck of a company that needs to move with speed and agility.
On one hand, Apple and Samsung have a very complementary relationship because the two companies' cultures and business models could hardly be more different in the same industry. As much as I abhor Samsung's shameless copying of Apple's ideas I have to hand it to Samsung as a world class technology company. Samsung has thoroughly vanquished the likes of Sony, Panasonic and other Japanese electronics companies that it was once decades behind on. Samsung knows what it's doing and they're very good at it.
As a Korean-American who lived most of my youth there and still visit on a regular basis, I really don't like the inordinate amount of power, wealth and influence the family-controlled chaebol conglomerates like Samsung, LG and Hyundai wield on the economy and society of Korea. These companies act and operate like military kingdoms hellbent on conquest of anything and everything. Why does Samsung dabble in everything from selling life insurance to building apartment complexes and from building rice cookers to huge oil tankers?
The sprawl of these conglomerates is just absurd. They grew unchecked during the authoritarian rule of President Park Chung-Hee in the 60's and 70's with generous subsidies from a government that was only interested in exporting as many goods as possible at the cheapest possible prices. Now these conglomerates are so deeply entrenched that the government is almost powerless to stop them. Trust me; a lot of the Korean populace do not like these conglomerates at all but at the same time, they sure wish their kids can get employed there.
What would be really good for the Korean economy is to break up these humungous monolithic conglomerates and set each of their business divisions free to compete in a more nimble and innovative manner instead of reporting their business results every quarter to the almighty chairman and hope he is satisfied with the results. They aren't driven to develop and produce truly great products; they're more concerned about getting their chops busted by their superiors in a huge pyramid-like structure.
Sure, that kind of thing exists in Apple as well and many other large companies but the way the typical Korean conglomerate works is enforced through a rigid seniority system and culture of intimidation. A friend of mine who works at Hyundai's department store division told me that once the chairman was visiting their building. There were sirens going off in the building shouting: "The Chairman is coming! The Chairman is coming!" The office workers had to line up the hallways like honor guards and bow down as the Chairman and his contingent strolled by. I mean, yeah, this kind of stuff still exists in Korea. Samsung is very similar with strict suit-and-tie dress codes and military-like hierarchy and formalities.
Anyway, you can see why these types of companies are very good at manufacturing and not so good at coming up with their own creative ideas. Apple will leave the manufacturing to the ones who are good at it and focus on what they do best.
Samsung Electronics is the tip of the surface when you look at the other lines of business that also bring the conglomerate enormous profits.
This is not true. Samsung Electronics makes up the majority of the revenue of the Samsung Group conglomerate. Out of Samsung Group's $220 billion in revenues in 2010, $134 billion was generated by Samsung Electronics. Apple will surpass Samsung Electronics' revenue in the coming year and Samsung Group's revenue in 2014. Samsung Group's other businesses combined aren't half as profitable as the Electronics company.
Do they wish to hand it off to mainly serve Apple and others resisting OLEDs, and so moot the competition perception, or is it strictly an economic move?
http://news.cnet.com/8301-1023_3-573...s-on-oled-tvs/
Whichever, one has to assume that Apple had to bankroll, if not assist in process engineering, the large-scale outlay of this previously dormant or modestly endowed new technology—large SHA screens at tremendous volume. I doubt the process engineering part, but they, Apple, seem to be claiming that in the PR about the screen here, under "Breakthrough Engineering:"
http://www.apple.com/ipad/features/
AlexKhan, thanks for another dose of realism here. I wonder about the reasons behind Samsung's spinning off of the LCD display division, which was said to be losing money, nearly a billion in one year (?).
Do they wish to hand it off to mainly serve Apple and others resisting OLEDs, and so moot the competition perception, or is it strictly an economic move?
http://news.cnet.com/8301-1023_3-573...s-on-oled-tvs/
Whichever, one has to assume that Apple had to bankroll, if not assist in process engineering, the large-scale outlay of this previously dormant or modestly endowed new technology—large SHA screens at tremendous volume. I doubt the process engineering part, but they, Apple, seem to be claiming that in the PR about the screen here, under "Breakthrough Engineering:"
http://www.apple.com/ipad/features/
It seems this is more of a strategic business move to accommodate a shift in display technologies for the future. You notice that this spun-off company will still be called Samsung and be a wholly owned subsidiary of the Samsung Group. To me, it looks like a reorganization move to make the business more nimble and competitive and not be bound under the huge Samsung Electronics umbrella.
Samsung has to be worrying about the rise of new electronics giants in China. Samsung isn't the Chinese army it used to be and must adapt to the changing market dynamics in the electronics manufacturing sector. Samsung won't be able to compete with the likes of China's Haier Group and Huawei in the future strictly based on price. Samsung has to move upstream as purveyor of their own branded products in consumer electronics and guess who's standing in their way?
I'm not too familiar with the global display business in general. Components' side of things don't interest me too much. It just seems that Samsung is feeling the pressure of new electronics giants emerging in China. The LCD has become commoditized and, as we all know, commodities aren't fun for manufacturers.
Right now Samsung will stop to sell LCD devices in China, only LED and AMOLED will be sold.
Samsung is investing in new AMOLED factories for high resolution displays and new high resolution LED.
I really doubt in 2 years we can find Samsung devices with LCD displays.
Apple, the company is amazing at putting all the pieces together but they are NOT inventors.
So now another asshat comment saying Apple doesn't invent anything. You want to tell us all their R&D and patents are just for marketing?
Again, Samsung producing the displays is as much proof that Samsung invented the display tech as Foxconn manufacturing the iPhone is proof that Foxconn designed the iPhone. As previously noted this is right up LG's street, not Sharp or Samsung.