Samsung denies rumors of price increase for Apple chip production - report

Posted:
in General Discussion edited January 2014
Contradicting reports out of the Far East are divided on whether Samsung has actually chosen to increase the price of mobile processors for Apple.

An unnamed Samsung official spoke with Seoul-based newspaper The Hankyoreh to deny earlier claims that the company had forced a 20 percent price hike on Apple, as noted by The Street on Wednesday. That disputes an earlier rumor published on Monday by Korean newspaper Chosun Ilbo.

The official reportedly claimed that Samsung's prices "are set at the beginning of the year and aren't changed easily."

The original, now-disputed report cited an unnamed person allegedly familiar with negotiations between the two companies. But Wednesday's report also does not feature a name or direct quote from the unknown Samsung official.

Whether or not Samsung has raised its prices on Apple, there is a growing rift between the two companies as they compete in the smartphone, computer and tablet spaces, to name a few. While Samsung and Apple are bitter rivals, Samsung is also one of Apple's largest suppliers.

Apple's custom-designed chips found on the iPhone, iPad, iPod touch and Apple TV are built by Samsung at its chip fabrication plant in Austin, Tex. There have been claims that Apple plans to move production away from Samsung to Taiwan Semiconductor Manufacturing Co., but so far Samsung remains the sole supplier of custom ARM-based processors for Apple's mobile devices.

Samsung Austin Plant
Samsung's Austin, Texas Plant | Source: Samsung


Last week, yet another unsourced 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.

If Samsung does in fact increase the price it charges Apple for building its mobile processors, the change is expected to reduce the company's overall margins by as much as 2 percentage points, Gene Munster of Piper Jaffray said earlier Wednesday. Munster also said he would not be surprised if a price increase from Samsung turned out to be true, "given the legal tension" between the two companies.

Apple's battle with Samsung has remained heated, even as Apple has reached licensing agreements with other handset makers, such as a newly announced deal with HTC. In comments publicized this week Shin Jong-kyun, the head of Samsung's mobile and IT division, indicated his company doesn't intend to negotiate a settlement with Apple "at all."

The terms of HTC's settlement with Apple are secret, but market watchers have suggested HTC is likely paying Apple between $6 and $8 for each phone it sells. The deal is predicted to pay $280 million to Apple in a year, an amount that Shaw Wu with Sterne Agee said will be "immaterial" to the iPhone maker, which is projected to secure $48 billion in net income in its fiscal year 2013.
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Comments

  • Reply 1 of 34
    rayzrayz Posts: 814member
    Did anyone really believe it was so easy to just jack prices on a signed contract?

  • Reply 2 of 34
    stock manipulation so easy nowadays with unverified blogs
  • Reply 3 of 34
    Apple have probably increased their demand on the faster more expensive ones.
    So they could be paying 20% more per unit with no price increase.
  • Reply 4 of 34
    lkrupplkrupp Posts: 7,315member
    Stuff like this is great. The iHater crowd is all stirred up over the alleged price increase. C|net crowd went wild cheering Samsung for sticking it to Apple same way they did when the rumor mill said Samsung was not going to supply displays anymore. Then next day, WHAM, rumor shot down by Samsung. It's worth the price of a soda and popcorn to watch this show, lawn chair all comfy.
  • Reply 5 of 34
    To which Samsung added, "but thanks for the idea."
  • Reply 6 of 34
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by AppleInsider View Post





    Whether or not Samsung has raised its prices on Apple, there is a growing rift between the two companies as they compete in the smartphone, computer and tablet spaces, to name a few. While Samsung and Apple are bitter rivals, Samsung is also one of Apple's largest suppliers, AND...


    Apple is one of Samsung's largest industrial design providers.

  • Reply 7 of 34
    "AppleInsider will continue to stay with this story as it develops and milk it for every drop of click bait."
  • Reply 8 of 34
    sflocalsflocal Posts: 4,701member


    I just shook my head when I first read the price increase rumors.  Didn't even bother to post replies to the wannabe-armchair-accountants and the typical anti-apple brigade.



    Last time I checked, companies sign what are called "contracts" with all the pricing built in for a given amount of time.  This was no different.



    But no, iHaters, trolls, and Fandroid crybabies just itch to get in their 2-cents of whimsical so-called wisdom on why it makes perfect sense.



    Idiots.  Simple as that, and I rarely use that word to describe someone.

  • Reply 9 of 34
    gatorguygatorguy Posts: 21,117member


    Agreed. Both supporters and detractors of Apple were all too happy to believe the story. One side claiming it's proof of how unscrupulous Samsung is while the other says good for 'em, get their $billion back. Why do members take some rumors as fact and other rumors as ridiculous? I think it all comes down to what you want to believe.

  • Reply 10 of 34
    The Samsung price increase ruse is just another in a series of unfounded, poorly sourced anti-AAPL rumors. For example, on November 9th, a Bloomberg West TV/Radio columnist lambasted Tim Cook as having lost his "Supply Chain" touch. The following Monday, reports surfaced that the 4G versions of the iPad Mini and the iPad4 were SHIPPING! Oh, and the iPhone5 wait is down to two weeks for some models and to ZERO for many others at Sprint.

    As a long time AAPL shareholder, I've seen this passion play many times before. It always starts at the end of September, but by the middle of December, when the crowds at the Apple Stores make the evening news, suddenly AAPL is once again, the halo stock.

    Use these periods of short-seller negativity to add to your position. AAPL's Q1 results will blow away Wall Street.
  • Reply 11 of 34
    sflocalsflocal Posts: 4,701member

    Quote:

    Originally Posted by Gatorguy View Post


    Agreed. Both supporters and detractors of Apple were all too happy to believe the story. One side claiming it's proof of how unscrupulous Samsung is while the other says good for 'em, get their $billion back. Why do members take some rumors as fact and other rumors as ridiculous? I think it all comes down to what you want to believe.





    Gone are the days of real journalism.  To report facts only.  This is what I hate about our hyper-connected society now.  While such easy access to information is a great thing, it's so incredibly easy for someone to overhear someone sitting at another table about a "what if" thing, misunderstand it, post it somewhere and have it take off like wildfire.



    Media outlets (including AppleInsider) should be ashamed for click-whoring.  I'm just getting fed up with the direction (downhill) the media is taking everything with having zero concern with the ramifications.



    Sad that no penalty can be dropped on folks that post nonsense and have it possibly affect the stock price of any given company.  Downright manipulation as far as I'm concerned.

  • Reply 12 of 34


    Well said!

  • Reply 13 of 34
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by sflocal View Post




     


    Media outlets (including AppleInsider) should be ashamed for click-whoring.  I'm just getting fed up with the direction (downhill) the media is taking everything with having zero concern with the ramifications.

     



    Somehow I'm sure that this involves Jill Kelly since she is a South Korean honorary consul.

  • Reply 14 of 34
    $280M in a year ... $6-8 per phone ...

    Is HTC selling 35 to 45M smartphones per year?

  • Reply 15 of 34
    richlrichl Posts: 2,213member
    Samsung chip prices are "quite smooth" then?
  • Reply 16 of 34


    >Somehow I'm sure that this involves Jill Kelly


     


    You're living dangerously.  You know at least _one_ of those women is le femme Nikita and do you really want a visit from one of them late at night?


     


    (Apple products have become so thin they won't stop many projectiles these days!)

  • Reply 17 of 34
    hill60hill60 Posts: 6,992member


    Does Samsung want to encourage buyers of their products to pay cash in advance by offering discounts or do they want them to hold on to their cash for 30, 60 or 90 day contract terms?


     


    The simple answer to why the 20% price increase rumour makes as much sense as trucks full of nickels pulling into Cupertino.

  • Reply 18 of 34
    indiekiduk wrote: »
    stock manipulation so easy nowadays with unverified blogs
    Correct. Corporate espionage in plain sight...
  • Reply 19 of 34
    jfc1138jfc1138 Posts: 3,090member


    The chip division most likely has some say in it's own agenda: Apple is a big customer....

  • Reply 20 of 34
    lkrupplkrupp Posts: 7,315member
    gatorguy wrote: »
    Agreed. Both supporters and detractors of Apple were all too happy to believe the story. One side claiming it's proof of how unscrupulous Samsung is while the other says good for 'em, get their $billion back. Why do members take some rumors as fact and other rumors as ridiculous? I think it all comes down to what you [SIZE=14px]want[/SIZE] to believe.

    Absolutely. Ask any politician what's in their bag of tricks and they'll pull this one out every time. Tel l'em what they want to hear and they'll believe it no matter what.
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