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Apple CEO has a glass of wine with Samsung CEO, laughing while reading fanboys of both companies fight about which company is best. wink

• ihsw 13y ago
  Samsung and Apple are both massive companies with an immense amount of overlap, so one of them boycotting the other would be like the US boycotting China. It just doesn't make sense. Although it's only prudent that they still keep each-other at arms length, and scrutinize every business decision with the other.
  • revelation 13y ago
    Huh? Is Apple running a fab in their backyard? What exactly do they own in terms of technology that others rely on?
    • wmeredith 13y ago
      They own a customer base willing to pay them billions of dollars per quarter.
    • georgemcbay 13y ago
      The suggestion was that the relationship is mutually beneficial, not that it was bi-directional in terms of components traded. Apple is like the USA to Samsung's China in this specific relationship in that the product (components in this case) pretty much goes one way, but both still rely on the relationship. Samsung makes some of the components Apple needs, Apple buys those components. Apple needs Samsung for inexpensive chip fab, Samsung needs Apple for the revenue provided in return.
      • revelation 13y ago
        I think you are overestimating how much Samsung needs Apple as a customer. Gigantic companies as Samsung are simultaneously active in any number of large markets. They do not need single customers, they do not even need whole markets. They are essentially investment holdings that will move out and into markets as they mature or are commoditized.
        • Jtsummers 13y ago
          And if Samsung unilaterally ends their relationship with Apple it sets a dangerous precedent. If you knew that your trading partner would end their sale of products to you because you had a (valid or invalid) suit against one division of their business or had a product suite that competed with one of their division's product suites, would you want to do business with them or would you find someone that can actually play well with others?
          • Kequc 13y ago
            How would you determine whether or not that was true about the next company? What about business that is ended between companies due to overlapping interests? That happens all the time.
            • Jtsummers 13y ago
              Those were outside the hypothetical that was proposed (namely that Samsung could give up Apple as a customer and not notice it - presumably meaning longterm). Sure companies end relationships when they have overlapping interests, but sometimes they prop each other up as a result of that as well - see Microsoft's support of Apple in 1997, monetarily and with product support. It was apparently to their benefit to support a (failing) competitor, in this case I'm guessing it was to do with the anti-trust charges. But they were competitors at the same time. In this particular case though (Samsung/Apple) the overlapping interest is part of Apple's core, and just one of many Samsung divisions. It would not be (or at least it's not obvious that it would be) in Samsung's interest to poison the well of their component division just because it happens that their phone division competes with Apple. Ditching Apple may not, on its own, be an issue after a couple years, but it would put other component customers on edge. See the concern some Android phone manufacturers had when Google bought Motorola's mobile division for a similar issue but from the software side.
        • megablast 13y ago
          They would lose billions, maybe 10 to 20 billions a year from Apple. Nobody would seriously end this relationship from Samsungs end, at least if they had any brain cells.
      • Miyamoto 13y ago
        Samsung does not need Apple. Apple probably doesn't need Samsung either, but they've chosen to need them for this processor.
        • mathattack 13y ago
          It's not a matter of needing each other. As long as there's a positive NPV on working together, they'll do it. They each might say, "We benefit X, but there's a risk that costs Y." As long as X is greater than Y, they'll work together. They don't have to, but as long as they're the best partners for a given transaction, why not?
        • georgemcbay 13y ago
          Oh, I agree. "need" may not have been the be the best word to use there. I didn't mean to imply that either needs the other by the strictest sense of the word. I meant it more in the sense of "I need my morning coffee". I don't really need it, but I'd, you know, really, really like to have it.
    • brianbreslin 13y ago
      They benefit from Apple's Billions in up front purchasing.
    • redwall_hp 13y ago
      Apple does own fabs. They bought PA Semi a few years ago. I think they also picked up a NAND place somewhere overseas more recently as well.
      • djcapelis 13y ago
        PA Semi was a fabless company.
    • hugi 13y ago
      Invent it?
    • Spooky23 13y ago
      No, but there is evidence suggesting that they are about to partner with GlobalFoundaries, who is building another new fab in NY, supposedly for Apple demand.
    • CountSessine 13y ago
      They buy lots of chips and components from a company that's invested a lot of money to supply that demand. If Apple abruptly stopped or was forced to stop buying flash from Samsung, for example, Samsung would take a bath on their fab investments. Apple is easily their single biggest customer for flash and SOC fab production.
  • yogrish 13y ago
    True to some extent. Fundamentally Samsung is a Diversified company but Apple is very Focussed. Samsung electronics itself is so massive that one branch of it(LSI), depends on Apple for its volume which can keep its Fab busy for years. But, its other branch(Mobile) competes with Apple phones though. Similarly Apple depends on sammy only for its proven Fab and competitive Prices. Guess TSMC is no where near Sammys Fab technology and lost Apples deal. Btw, Samsung is so massive and diversified that it is into areas like Construction, Ship Building, Finance, Automobile, Retail. Its a very different company. It adapts to any domain, very fast. Few years back it became Top player in consumer electronics,last year it surpassed Apple in smart phones sales, had been a top player in Memory and tomorrow if space travel is the money spinner, it will be there. You know Burj Khalifa, Taipei 101, Petronas are all built by Samsung ofcourse Samsung Engineering & Construction. So we need to mind which part of samsung we are talking about.
    • bane 13y ago
      I had heard about conglomerates of course. But my first visit to South Korea, the totality of it blew my mind -- the cyberpunk future of company-nations coming out of Asia was real. I remember that between getting off of the plane and going to bed, I had ridden in at least 2 Samsung built vehicles (a bus and a taxi -- dunno about the subway), shopped in a Samsung owned store, made some phone calls on a Samsung phone, got into a Samsung built apartment building and taken a Samsung elevator up to an apartment filled with Samsung appliances where I went to sleep watching news on a Samsung TV. Later, on the same trip I experienced a very similar conglomerate built world in the form of LG and Daewoo, even getting a trip to a massive Daewoo ship building facility that cranked out - to spec - everything from oil tankers to submarines.
      • swamp40 13y ago
        Back in the early 90's I bought a $30 VCR from some no-name foreign brand no one had ever heard of here in the US. 1/3 the price of the name brand stuff. Then I went to Seoul and saw that same company brand on top of the largest skyscraper in the city - Daewoo. Absolutely mind blowing.
• janlukacs 13y ago
  of course, just like republicans and democrats in the US :)
• yapcguy 13y ago
  Reporters should ask Tim Cook the following question: "Does Apple make anything which is best-in-class which other companies need?". The answer is obvious. No. > "Chipworks also found the new M7 motion coprocessor inside the iPhone 5s, which is labeled as the NXP LPC18A1. It's based on the LPC1800 series Cortx-M3 microcontrollers made by NXP. As for the enhanced camera in the iPhone 5s, the iSight module was discovered to be a custom Exmor-RS sensor from Sony. Other parts in the handset include a touchscreen controller from Broadcom, an LTE modem by Qualcomm, and NAND flash from SK Hynix." http://appleinsider.com/articles/13/09/20/samsung-confirmed-to-be-manufacturer-of-apples-new-a7-chip-in-iphone-5s http://appleinsider.com/articles/13/09/20/samsung-confirmed-...
  • Steko 13y ago
    Best in class products from Apple which companies use include the iPhone, iPad and their laptops. If you're just pointing out that Apple isn't a component maker, I'm not sure what the point is other than trivia.
  • ek 13y ago
    This is potentially a bit of a loaded question, since compare the following similar question: "Does Apple use any components which are best-in-class and unavailable to competitors?" The answer there is "yes", at least according to a bevy of evidence from the AnandTech review/benchmarks: http://anandtech.com/show/7335/the-iphone-5s-review http://anandtech.com/show/7335/the-iphone-5s-review. edit: To clarify, I mean this because the A7 is a custom design that just happens to be fabbed by Samsung under contract, rather than an off-the-shelf component, like the M7, that has simply been granted a marketing buzzword. Other OEMs will not simply be able to integrate the A7 in their products for this reason.
• kyro 13y ago
  While Jony Ive sips on a glass of Hpnotiq with orange juice.
• simmons 13y ago
  I don't think that really describes this situation (competitors in one product market are often supply chain partners in another). However, I can really relate to your comment. As someone who considers myself to be more on the producer side of the consumer electronics equation, I'm often perplexed at how many consumers make these brands part of their identity, the way people were really passionate about what kind of shoes to wear back in the 80's! This sort of consumer excitement probably does benefit the producers.
• dominotw 13y ago
  Samsung has fanboys ?
  • jonnathanson 13y ago
    I work with a fair number of (awesome!) Korean engineers, and I can say that yes, Samsung has a lot of fanboys. It's sort of like the Apple of Korea. It's also been gaining a lot of admiration from A/V enthusiasts in the States, having easily supplanted Sony as the high-end consumer electronics maker of choice for TVs and such. Samsung is a very impressive company. It doesn't use the Nike-esque marketing playbook Apple does, and as such, it doesn't inspire the hero worship or the fanaticism in the States. But it's been quietly building up a massive empire. [Full disclosure: I say this as an Apple fanboy, and as the resident iOS 7 apologist at my office (everyone here's firmly on Team Android). I own plenty of Apple and Samsung devices, and I don't feel the need to declare absolute brand loyalty to any one provider.]
    • craigyk 13y ago
      WHAT? First, Samsung doesn't use a Nike-esque marketing playbook? Does Apple? I'm not even sure what Nike-esque means.
      • jonnathanson 13y ago
        I'm sorry, it's Friday and I'm a little exhausted, so my sarcasm meter is on the fritz. Apologies if I'm inducing a facepalm in saying this, but... Nike's playbook -- as made famous by Phil Knight in the 70s, 80s, and 90s -- was to market a lifestyle, not a shoe. Nike is an incredibly innovative marketing company, and Steve Jobs himself fondly referenced Phil Knight's work at Nike as inspiration for how he thought about marketing at Apple.
        • gbog 13y ago
          I didn't read the GP as sarcasm, and if it was your answer is still constructive, congrats.
    • 13y ago
• blah32497 13y ago
  But it's a fundamentally uneven relationship. If Apple starts getting marketshare, Apple wins and Samsung wins. If Android starts getting marketshare. Samsung wins and Apple loses. I bet each production cycle Apple starts threatening it will manufacture its own chips and it starts to feed the rumor mill. Samsung gets nervous and gives them a very good deal. Even if Samsung's profit margin drops significantly, it's still going to look much much better to the markets than if they lose their Apple contract.
  • craigyk 13y ago
    The way I look at it, is that Apple is trying to have its way by shopping between Samsung, TSMC, and any others. Their leverage doing this comes from offering bulk purchases, or in the case of LCDs, helping to finance large capital expenditures. Their biggest worry right now is that Samsung's competition doesn't seem able to compete, at least at scale. At the end of the day though, if push ever comes to shove, there isn't much they couldn't afford to buy outright, even their own fabs. I was holding out hope that they were trying to save 200B to build out their own wireless infrastructure, but they could conceivably buy control of Intel instead.
  • Einherji 13y ago
    Keep in mind that the ARM processor space operates on razor thin margins, and Apple's iPhone business does not. Also it has been rumored for a long time that apple is moving most of its chip fab business to TSMC, but I suspect their waiting for the next process node before making the jump. A company that values reliability like apple prefers a mature process.
  • Steko 13y ago
    "If Android starts getting marketshare. Samsung wins and Apple loses." This is conventional wisdom and at some level of course it's true but in general I think it's misleading. The fact is that the markets Apple and Samsung are in are not identical. The market Apple competes in roughly equates with the top third of the smartphone market. Samsung competes in the entire phone market. It's quite possible for both to gain market share at the same time in their respective markets. And even if they weren't it's possible for both to lose market share but still be successful because the market for smartphones itself is increasing rapidly.