Samsung reportedly hits Apple with 20% price increase for iPhone, iPad chips
Samsung has allegedly increased the price of its mobile processors by 20 percent for just one company: Apple.
Details on the price hike were published on Monday by Chosun Ilbo, via MarketWatch. The details come from an unnamed person allegedly familiar with negotiations between the two companies.
The person indicated that Samsung asked for a "significant price raise" for building chips such as the A6 chip found in the iPhone 5 and the A6X processor that powers the fourth-generation iPad.
Apple apparently balked at the terms of the deal at first, but eventually accepted the 20 percent price hike, as it could not find any other company to build its mobile processor.
All of Apple's application processors for the iPhone, iPad and iPod touch are made by Samsung. The company produces the chips at its fabrication plant in Austin, Tex.
Samsung is expected to build a total of 200 million chips for Apple this year. The companies have allegedly signed a long-term supply contract through 2014.
Although though Samsung remains the sole supplier of Apple's custom chips found in the iPhone and iPad, the company has long been rumored to be pursuing a chipmaking partnership with Taiwan Semiconductor Manufacturing Co. One report from last month claimed that TSMC could begin building quad-core 20-nanometer chips for Apple as soon as late 2013.
And in October it was said that Apple was getting "serious" about moving chip production away from Samsung. Around the same time, Apple also hired away former Samsung chip designer Jim Mergard, who also designed and developed chips for AMD for 16 years.
Last week, one report claimed that Samsung was expecting to lose a portion of its future chip orders from Apple. It indicated that the Korean electronics company may put off construction of a new fabrication facility because of the expected decrease in orders.
Details on the price hike were published on Monday by Chosun Ilbo, via MarketWatch. The details come from an unnamed person allegedly familiar with negotiations between the two companies.
The person indicated that Samsung asked for a "significant price raise" for building chips such as the A6 chip found in the iPhone 5 and the A6X processor that powers the fourth-generation iPad.
Apple apparently balked at the terms of the deal at first, but eventually accepted the 20 percent price hike, as it could not find any other company to build its mobile processor.
All of Apple's application processors for the iPhone, iPad and iPod touch are made by Samsung. The company produces the chips at its fabrication plant in Austin, Tex.
Samsung is expected to build a total of 200 million chips for Apple this year. The companies have allegedly signed a long-term supply contract through 2014.
Although though Samsung remains the sole supplier of Apple's custom chips found in the iPhone and iPad, the company has long been rumored to be pursuing a chipmaking partnership with Taiwan Semiconductor Manufacturing Co. One report from last month claimed that TSMC could begin building quad-core 20-nanometer chips for Apple as soon as late 2013.
And in October it was said that Apple was getting "serious" about moving chip production away from Samsung. Around the same time, Apple also hired away former Samsung chip designer Jim Mergard, who also designed and developed chips for AMD for 16 years.
Last week, one report claimed that Samsung was expecting to lose a portion of its future chip orders from Apple. It indicated that the Korean electronics company may put off construction of a new fabrication facility because of the expected decrease in orders.
Comments
no more volume discount for Apple?
Rival companies like Samsung pulling shit like this is exactly why Apple is so religious about doing everything they possibly can themselves.
This doesn't make sense for Samsung from a business perspective. They need Apple's money. Apple's already mad at them over the patent infringement and counter lawsuits. Driving up the prices for them alone will just make Apple more likely to find/create competing chip-makers to take over production for them at the earliest possible moment.
In what way could Samsung benefit from this decision in the long term?
Keep in mind it's just another rumor originating from the Korean press.
It's likely the Apple was getting a healthy discount before deciding to scale back their dependence on Samsung. Only makes sense that Samsung is going to raise prices to make up for the loss in high volume profits-- as any other company would. If Apple doesn't want to work with Samsung, why should Samsung work with Apple (to provide a good deal)?
Quote:
Originally Posted by Shunnabunich
Rival companies like Samsung pulling shit like this is exactly why Apple is so religious about doing everything they possibly can themselves.
Seriously, Apple initiated all those lawsuits against Samsung, Apple's largest supplier, and you didn't see this coming?
Quote:
Originally Posted by Gatorguy
Keep in mind it's just another rumor originating from the Korean press.
Chosun Ilbo is not exactly like the KoreaTimes.com
The report claims that they verified the source - unlike the Koreatime.com citing some dubious unnamed Samsung executive.
Quote:
Originally Posted by FreeRange
Fk samsung. They are a disgusting scumbag company. The faster apple can dump them the better. And FK the UK judge at the same time. Apparently morons abound not only in the US, but in the UK as well.
You don't understand how business works. If you were supplying a client with massive volumes of product at low profit margin and they decided to stop buying from you, what would YOU do?
Welcome to the harsh reality of the business world. Vendors do this all the time in other sectors. Is it dirty? absolutely. Frankly I see this as Samsung saying, hey you want to go, there's the door. Obviously they don't appear to care if Apple is a part of their business or not. regardless of what we think it means to them.
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Build your own factories, Apple. Build them in America.
'American Made' will make you the undisputed king, and would shut Apple hating, foreign company loving Fandroids, the Hell up.
Quote:
Originally Posted by Neo42
It's likely the Apple was getting a healthy discount before deciding to scale back their dependence on Samsung. Only makes sense that Samsung is going to raise prices to make up for the loss in high volume profits-- as any other company would. If Apple doesn't want to work with Samsung, why should Samsung work with Apple (to provide a good deal)?
True enough, and I imagine that Apple expected this. It's worth the short term hit, IMO. The sooner they're shot of Samsung, the better.
Remember the story that Samsung was stopping the supply of ALL chips to Apple. Another bogus FUD story along with the news of an imminent iPhone 5s. Pathetic that "news sources" release lies.
Quote:
Originally Posted by tooltalk
Chosun Ilbo is not exactly like the KoreaTimes.com
The report claims that they verified the source - unlike the Koreatime.com citing some dubious unnamed Samsung executive.
The details come from an unnamed person allegedly familiar with negotiations between the two companies.
Yup, that's always a winner.
20% increase from what? come on people, this could be a 20% increase over the previous chip and if you are integrating more functionality in the a chip pricing some times goes up not down. As long as the 20% increase is still less than buying the individual piece then it not a cost increase for the product.
Making a statement about a 20% increase without providing the reference point is meaningless.
Quote:
Originally Posted by TeeJay2012
Remember the story that Samsung was stopping the supply of ALL chips to Apple. Another bogus FUD story along with the news of an imminent iPhone 5s. Pathetic that "news sources" release lies.
And it turns out that the stories about Samsung cutting screen supplies to Apple were also untrue.
http://news.cnet.com/8301-13579_3-57537773-37/samsung-says-its-still-supplying-lcd-panels-to-apple/
Seriously, Samsung instigated copying of Apples products, their main customer...and you didn't see this coming?
*flips coin*
Originally Posted by tooltalk
Seriously, Apple initiated all those lawsuits against Samsung, Apple's largest supplier, and you didn't see this coming?
Is it even possible for you to be this dense?