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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 ju

by 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.

by ihsw 13y ago

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.