Nokia rumored to join Apple in dumping Samsung as a supplier
With Apple known to be working overtime in its efforts to reduce its dependance on Samsung as a component supplier, word comes that other companies, including Nokia, are also considering plans to do the same thing, for similar reasons.
Apple's tight business partnership with Samsung became severely strained after the Korean electronics conglomerate initiated efforts to closely duplicate the success of the iPhone 3GS in 2010, followed by Samsung's subsequent cloning of the iPad and iPod touch under its "Galaxy" brand.
While Apple remains Samsung's largest customer (and Samsung a critical source of Apple's components), there are clear indications that the iPhone maker is seeking to shift its business to other component manufacturers and chip fabs, the same way that Apple has worked to divorce itself from dependance on Google for maps and other online services.
And just as Apple isn't the only company that has left behind Google Maps, "Apple isn't the only one moving away from Samsung," a well connected hardware industry source tells AppleInsider.
Together, Apple, Nokia and Samsung built just over half of the world's phones sold in the quarter, and Samsung accounted for almost half of that number. Samsung not only builds the most phones, but it also builds much of the memory chips, processors, displays and other components that other vendors use, albeit making far more of its profits from finished phones compared to its component sales.
Samsung's interest in entering the much more profitable smartphone business explains why its System LSI subsidiary (which builds chips, and is distinct and removed from the company's phone development operations) launched an "iPhone effect analysis," in September 2007, observing that the "hardware portion" of Apple's iPhone would offer "easy imitation."
Samsung's System LSI had access to Apple's confidential semiconductor orders, but wasn't in charge of designing or building Samsung's phones, a fact highlighted in Apple's case against Samsung.
"Samsung copied Apple's four years of work without taking any of the risks," Apple's attorney stated, directing attention to another internal document from March 2010 that presented 100 pages of "detailed instructions of what to copy," several of which were Apple's patented features, including its double tap to zoom utility patent and a icons with a 3D lighting effect.
Fearing potential consequences to its component business, Samsung has made efforts to emphasize the presence of a "strict internal firewall" between its component fabrication operations and its its smartphone business.
"The 'firewall' between component sales and smartphones [at Samsung]," individual familiar with Nokia's component orders from Samsung states, is "about as sturdy as a pile of kimchi."
The individual stated 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. When you see a Samsung (certain specialized new design for) OLED phone as you surely will, you are looking at something that was stolen from Nokia."
In January, Samsung said it will not reduce capital investments this year, despite concerns around losing Apple's business. The company also warned that "the furious growth spurt seen in the global smartphone market last year is expected to be pacified by intensifying price competition."
Samsung has been recently portrayed as if it were actually a scrappy young underdog to Apple, and new to the smartphone and tablet markets rather than representing the status quo of the stagnant smartphones market that existed before the iPhone. The increasing visibility of Samsung's public relations efforts appears to highlight a growing concern within the company of losing its component customers.
Apple's tight business partnership with Samsung became severely strained after the Korean electronics conglomerate initiated efforts to closely duplicate the success of the iPhone 3GS in 2010, followed by Samsung's subsequent cloning of the iPad and iPod touch under its "Galaxy" brand.
While Apple remains Samsung's largest customer (and Samsung a critical source of Apple's components), there are clear indications that the iPhone maker is seeking to shift its business to other component manufacturers and chip fabs, the same way that Apple has worked to divorce itself from dependance on Google for maps and other online services.
And just as Apple isn't the only company that has left behind Google Maps, "Apple isn't the only one moving away from Samsung," a well connected hardware industry source tells AppleInsider.
Supplier turned competitor
Among the companies evaluating their alternatives is Nokia, the world's second largest phone maker after Samsung. Gartner credits Nokia with selling 85 million phones in Q4 2012, nearly twice the number of iPhones Apple sold (43.5 million) and about 80 percent of the almost 107 million phones Samsung sold.Together, Apple, Nokia and Samsung built just over half of the world's phones sold in the quarter, and Samsung accounted for almost half of that number. Samsung not only builds the most phones, but it also builds much of the memory chips, processors, displays and other components that other vendors use, albeit making far more of its profits from finished phones compared to its component sales.
Samsung's interest in entering the much more profitable smartphone business explains why its System LSI subsidiary (which builds chips, and is distinct and removed from the company's phone development operations) launched an "iPhone effect analysis," in September 2007, observing that the "hardware portion" of Apple's iPhone would offer "easy imitation."
Samsung's System LSI had access to Apple's confidential semiconductor orders, but wasn't in charge of designing or building Samsung's phones, a fact highlighted in Apple's case against Samsung.
"Samsung copied Apple's four years of work without taking any of the risks," Apple's attorney stated, directing attention to another internal document from March 2010 that presented 100 pages of "detailed instructions of what to copy," several of which were Apple's patented features, including its double tap to zoom utility patent and a icons with a 3D lighting effect.
Samsung's "Firewall of Kimchi"
While the evidence that Samsung was methodically copying its largest customer's products only became public after Apple sued to stop Samsung, sources within other companies indicate that Samsung has behaved similarly with its other customers.Fearing potential consequences to its component business, Samsung has made efforts to emphasize the presence of a "strict internal firewall" between its component fabrication operations and its its smartphone business.
Samsung's "'firewall' between component sales and smartphones is about as sturdy as a pile of kimchi"An unnamed Samsung executive told Reuters last fall that Samsung considered its supply contract with Apple a "separate issue from the litigation," and noted that this "strict internal firewall" had been erected to "avoid potential conflicts of interest" with its major customers like Apple. However, Apple isn't alone in being skeptical of the security of Samsung's "internal firewall."
"The 'firewall' between component sales and smartphones [at Samsung]," individual familiar with Nokia's component orders from Samsung states, is "about as sturdy as a pile of kimchi."
The individual stated 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. When you see a Samsung (certain specialized new design for) OLED phone as you surely will, you are looking at something that was stolen from Nokia."
In January, Samsung said it will not reduce capital investments this year, despite concerns around losing Apple's business. The company also warned that "the furious growth spurt seen in the global smartphone market last year is expected to be pacified by intensifying price competition."
Samsung has been recently portrayed as if it were actually a scrappy young underdog to Apple, and new to the smartphone and tablet markets rather than representing the status quo of the stagnant smartphones market that existed before the iPhone. The increasing visibility of Samsung's public relations efforts appears to highlight a growing concern within the company of losing its component customers.
Comments
As usual, AI needs to hire a proofreader --- or writers who understand the English language.
Maybe Sammy should start making smart toilets?
Quote:
Originally Posted by jragosta
"Apple isn't along in begin skeptical of the security of Samsung's "internal firewall.""
As usual, AI needs to hire a proofreader --- or writers who understand the English language.
You mad?
But given the fact is that as we have outsourced our manufacturing to Asian countries, to cut costs we have not only lost all our ability to develop and innovate new products but also to rebuild old products.
Even if Apple wanted to manufacture the iPhone in the US it could not - we just cannot do it.
That means we are forced to go to thieves like Samsung and give away our technology and intellectual property for free.
That is the true cost of outsourcing.
Quote:
Originally Posted by jdsonice
I am really really surprised that Steve Jobs trusted Samsung. Asian companies have over the years demonstrated a remarkable lack of ethics and ability to be truthful.
But given the fact is that as we have outsourced our manufacturing to Asian countries, to cut costs we have not only lost all our ability to develop and innovate new products but also to rebuild old products.
Even if Apple wanted to manufacture the iPhone in the US it could not - we just cannot do it.
That means we are forced to go to thieves like Samsung and give away our technology and intellectual property for free.
That is the true cost of outsourcing.
This whole post is offensive. What a parochial point of view (possibly in more ways than one). Who is "we" for instance? Do you seriously think that the audience reading AppleInsider is composed strictly of white Americans? Also, "outsourcing" is an antiquated term now.
Quote:
Originally Posted by jdsonice
Even if Apple wanted to manufacture the iPhone in the US it could not - we just cannot do it.
That means we are forced to go to thieves like Samsung and give away our technology and intellectual property for free.
That is the true cost of outsourcing.
Unless you've read actual logistics or similar case studies, you're making things up.
Quote:
Originally Posted by Gazoobee
This whole post is offensive. What a parochial point of view (possibly in more ways than one). Who is "we" for instance? Do you seriously think that the audience reading AppleInsider is composed strictly of white Americans? Also, "outsourcing" is an antiquated term now.
What's the hot new trendy term for "outsourcing" these days?
Quote:
Originally Posted by peter236
Apple itself is a copycat of the first LG touchscreen phone. Apple does not even have the technology of making flash, ram and touch screens, and therefore had to patent rectangular shapes and outsource manufacturing
The LG KE850 or the prada was first announced on December 12, 2006. The design of the phone was shown in september of 2006. Just announced not sold or shown. An image of the device was shown in a press release on January 18th 2007. Again the device was not shown. It did not go on sale to the public untill May 2007. LG threatened apple with a lawsuit and quickly dropped it when apple showed them a working prototype of the apple iphone called "Purple" dated august 2005, and another working iphone prototype called "Howarth" dated march 2006. Those prototypes were also shown in the apple vs. samsung lawsuit.
Infact apple started development of the iphone in 2004 with Jonathan Ive leading a team of 1000 to start to work on project "Purple". Which later turned out to be the iPhone.
Steve Jobs unveiled the actual finished iPhone on January 9th 2007. It went on sale on June 29th 2007. Apple could prove without a shadow of a doubt that the iPhone was in development long before the prada LG KE850. Hense LG dropping the lawsuit. As for making flash memory apple makes there own memory controls (why make memory when you can buy it from one of a dozen companies of which samsung is just one) and has several patents for capacitive touch screens and a lot of innovation in that area. Apple also designs its own processors based on armv7 the current version of which is one of the fastest mobile processors on the market (A6X). The reason the iPhone 5 is so thin is because of one of those capacitive touch screen patents.
The apple copied lg is wrong and a tired old rant.
The lg prada was a very limited touch screen phone and no where near the sensitivity of the iPhones screen and had far less touch sensors than the iphone.
So others are catching on to the CopyMaster's penchant for borrowing. Mmmm, I wonder if this is why information is coming out regarding an iWatch in the make from Apple. Would it be that Apple is giving FacsimileSam a chance to dive into the deep end of innovation on its own?
You know, after a while the name of the thief gets round and zipped pockets become the rage. China entrepreneur, be mindful. Opportunities opening up.
True. It is also composed of African Americans, Asian Americans, Arab Americans, Indian Americans and even Native Americans in addition to White Americans
Quote:
Originally Posted by jdsonice
But given the fact is that as we have outsourced our manufacturing to Asian countries, to cut costs we have not only lost all our ability to develop and innovate new products but also to rebuild old products.
Even if Apple wanted to manufacture the iPhone in the US it could not - we just cannot do it.
That means we are forced to go to thieves like Samsung and give away our technology and intellectual property for free.
That is the true cost of outsourcing.
Why not? Samsung manufactures memory chips and Apple's Ax processors down in Austin, Texas. In fact, Samsung Austin Semiconductor has been around since 1997 and has invested over $12B in that area so far.
That is an argument you will never win. Some people believe that Apple stole the iPad from Star Trek TNG too. There us no reasoning with that mentality.
Quote:
Originally Posted by Mechanic
(...in short) ... The apple copied lg is wrong and a tired old rant.
The lg prada was a very limited touch screen phone and no where near the sensitivity of the iPhones screen and had far less touch sensors than the iphone.
Mechanic, I'm afraid the facts are lost on the confused AppleHaters. But I sure appreciate the history lesson. Good stuff.
I seem to recall it was capable of a single touch element. No pinch and zoom functionality.
I kind of feel bad for those LG developers. I have to think they were under the impression that they were making history with their design just to get completely trounced by the iPhone before they could even have a proper demo of it. I wonder how many of the designers had wanted to work to add dual-touch or wanted to release it the previous year. Can you imagine them watching the 2007 MacWorld keynote of Jobs iPhone presentation. They had to be blown away.
"Business as usual."
But Cook just said Apple doesn't know the meaning of the word impossible. Apple used to build lots if things in the US. Truth is tax laws and accounting rules favor setting shop up overseas.