Is the Samsung-Apple Breakup Coming?
Long-term component partners Apple (NASDAQ:AAPL) and Samsung are finding it hard to continue that relationship since turning into bitter smartphone rivals. The two companies have already been at each other in courtrooms across the world fighting over alleged patent violations, and according to a new report, there is now a fresh wedge between them. Samsung has raised the price of mobile processor it supplies to Apple by almost 20 percent, Chosun Ilbo reported on Monday.
“Samsung Electronics recently asked Apple for a significant price raise in (the mobile processor known as) application processor,” a source was quoted as saying in the report, according to Market Watch. “Apple first disapproved it, but finding no replacement supplier, it accepted the (increase.)”
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Apple bought application processors for the iPhone and the iPad from Samsung to the volume of 130 million units last year and more than 200 million units this year, the report said. The Korean company has a contract to supply the processors, including the A6 chip for the iPhone 5 and the A6X processor for the fourth-generation iPad, until 2014 and the two companies have already begun reflecting the new supply price.
There have been rumors recently that Apple is seeking alternative chip suppliers in order to reduce its dependence on Samsung and may have recruited Taiwan Semiconductor Manufacturing (NYSE:TSM) to begin building quad-core 20-nanometer chips for it starting late next year. It has also been speculated that Apple may be looking to start designing its own processors and reduce its dependency on external suppliers. The company recently hired former Samsung and AMD (NYSE:AMD) chip specialist Jim Mergard.
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