6 ms·

This has to make things a little awkward considering Samsung has been fabbing Apple's mobile chips.

protomyth 16y ago
I get the feeling that the division doing the fabbing doesn't really care about the phone division beyond how many chips they are ordering.
kenjackson 16y ago
And displays and Flash. I recall at one point Samsung made 40% of the world's Flash memory.
- goatforce5 16y ago
  I'd have to assume that Apple was really comfortable with the terms of their component supply contracts with Samsung, and that Samsung can't find a way to get out of them at this point.
  - cooldeal 16y ago
    Why would Samsung want to get out of the contracts when they're making billions off them?
    - kenjackson 16y ago
      Because it could cost them even more. Apple is problematic for Samsung for two reasons: (1) This lawsuit and (2) Apple selling product that Samsung makes much higher margins on than displays and fabbing. Samsung ends up being in a MUCH better place if Apple becomes a niche player and Android and/or Windows Phone become the dominant platforms. If Samsung was able to get out of all contracts to Apple it could probably stall Apple's growth a bit. Not an enormous hit, but enough to help Android get some tablet strength and WP7 to get Mango out the door. Given that Samsung is the premiere vendor of non-Apple phones and tablets, and given this market is much more lucrative than components, they may be willing to give up 4% of revenue in a powerplay. With that said they probably have contracts through 2011. Although if they were late on delivering the product, they could probably deal with the penalties, since they're probably small in comparison.
      - iamdave 16y ago
        Samsung IS Apple in South Korea, and for what it's worth, an event like this is not by an stretch of the imagination going to hurt them. Especially when you consider Samsung has a lot more going for it than home appliances and electronics in the United States. That tower in Dubai? Guess who built it.
- rsynnott 16y ago
  Samsung doesn't make the iPhone or iPad display; LG does. There may at this point be others; certainly, people have noticed minor performance differences in some newer iPhone 4 displays.
  - kenjackson 16y ago
    http://www.slashgear.com/samsung-clinch-240m-ipad-display-contract-4th-gen-iphone-using-samsung-lcds-2579131/ http://www.slashgear.com/samsung-clinch-240m-ipad-display-co... I don't know the details of if the deal broke last minute, but that's what I'd read. UPDATE: More here -- http://www.slashgear.com/lg-and-samsung-ipad-screen-shipment-numbers-are-big-29121749/ http://www.slashgear.com/lg-and-samsung-ipad-screen-shipment...
- gonzo 16y ago
  Micron and Intel are large suppliers,too.
r00fus 16y ago
It's only confusing if you think this lawsuit is meant to be won on merits and not to primarily annoy a competitor into not competing. It's placing pressure on Samsung to "toe the line" and "deliver our components, not your own products".
- warfangle 16y ago
  Makes me wonder how many patents of Samsung's that Apple is infringing upon?
  - kenjackson 16y ago
    I don't know, but when you see lawsuits like this it becomes clear why companies patent everything they can. It would suck to be in a position where Apple could come after you and you have no response. You have to have a patent portfolio to fight people attacking you.
- jamesaguilar 16y ago
  Seems quite likely from this guy's analysis that it could be won on merits. By making the lawsuit, Apple is also making a statement that it believes the case has merit. And winning the case on the merits (or settling it because a victory for Apple would be likely) would profit Apple significantly. On the other hand, there is no chance that Samsung will shut down its phone division, whether or not Apple wins the lawsuit. So I cannot understand how you got the impression that Apple is making this lawsuit in order to annoy Samsung into not competing. That is a much less likely explanation for the suit.
  - r00fus 16y ago
    > On the other hand, there is no chance that Samsung will shut down its phone division, whether or not Apple wins the lawsuit. Samsung may not shut down their phone operation but this suit could make them re-evaluate the cost-benefit of Android phones... others have mentioned that this is a proxy lawsuit against Google, I'd agree.

I get the feeling that the division doing the fabbing doesn't really care about the phone division beyond how many chips they are ordering.

kenjackson 16y ago

And displays and Flash. I recall at one point Samsung made 40% of the world's Flash memory.

goatforce5 16y ago
I'd have to assume that Apple was really comfortable with the terms of their component supply contracts with Samsung, and that Samsung can't find a way to get out of them at this point.
- cooldeal 16y ago
  Why would Samsung want to get out of the contracts when they're making billions off them?
  - kenjackson 16y ago
    Because it could cost them even more. Apple is problematic for Samsung for two reasons: (1) This lawsuit and (2) Apple selling product that Samsung makes much higher margins on than displays and fabbing. Samsung ends up being in a MUCH better place if Apple becomes a niche player and Android and/or Windows Phone become the dominant platforms. If Samsung was able to get out of all contracts to Apple it could probably stall Apple's growth a bit. Not an enormous hit, but enough to help Android get some tablet strength and WP7 to get Mango out the door. Given that Samsung is the premiere vendor of non-Apple phones and tablets, and given this market is much more lucrative than components, they may be willing to give up 4% of revenue in a powerplay. With that said they probably have contracts through 2011. Although if they were late on delivering the product, they could probably deal with the penalties, since they're probably small in comparison.
    - iamdave 16y ago
      Samsung IS Apple in South Korea, and for what it's worth, an event like this is not by an stretch of the imagination going to hurt them. Especially when you consider Samsung has a lot more going for it than home appliances and electronics in the United States. That tower in Dubai? Guess who built it.
rsynnott 16y ago
Samsung doesn't make the iPhone or iPad display; LG does. There may at this point be others; certainly, people have noticed minor performance differences in some newer iPhone 4 displays.
- kenjackson 16y ago
  http://www.slashgear.com/samsung-clinch-240m-ipad-display-contract-4th-gen-iphone-using-samsung-lcds-2579131/ http://www.slashgear.com/samsung-clinch-240m-ipad-display-co... I don't know the details of if the deal broke last minute, but that's what I'd read. UPDATE: More here -- http://www.slashgear.com/lg-and-samsung-ipad-screen-shipment-numbers-are-big-29121749/ http://www.slashgear.com/lg-and-samsung-ipad-screen-shipment...
gonzo 16y ago
Micron and Intel are large suppliers,too.

r00fus 16y ago

It's only confusing if you think this lawsuit is meant to be won on merits and not to primarily annoy a competitor into not competing. It's placing pressure on Samsung to "toe the line" and "deliver our components, not your own products".

warfangle 16y ago
Makes me wonder how many patents of Samsung's that Apple is infringing upon?
- kenjackson 16y ago
  I don't know, but when you see lawsuits like this it becomes clear why companies patent everything they can. It would suck to be in a position where Apple could come after you and you have no response. You have to have a patent portfolio to fight people attacking you.
jamesaguilar 16y ago
Seems quite likely from this guy's analysis that it could be won on merits. By making the lawsuit, Apple is also making a statement that it believes the case has merit. And winning the case on the merits (or settling it because a victory for Apple would be likely) would profit Apple significantly. On the other hand, there is no chance that Samsung will shut down its phone division, whether or not Apple wins the lawsuit. So I cannot understand how you got the impression that Apple is making this lawsuit in order to annoy Samsung into not competing. That is a much less likely explanation for the suit.
- r00fus 16y ago
  > On the other hand, there is no chance that Samsung will shut down its phone division, whether or not Apple wins the lawsuit. Samsung may not shut down their phone operation but this suit could make them re-evaluate the cost-benefit of Android phones... others have mentioned that this is a proxy lawsuit against Google, I'd agree.