Samsung Hits Apple With A 20% Hike For Chip Manufacture

[Sionyn]

a 'person familiar with negotiations between the two tech giants,' apparently confirming this special price hike for Apple. The source said: 'Samsung Electronics recently asked Apple for a significant price raise in application processor.
Apple first disapproved it, but finding no replacement supplier, it accepted the [increase].'"

http://www.marketwatch.com/story/samsung-hits-apple-with-20-price-hike-report-2012-11-11

[SeanB]

Gotta pay the fine somehow............

[G7PSK]

How else would they be able to pay the damages that Apple won in court. And what else could Apple expect for that matter.

[gerrysweeney]

Apple decided to get over-protective and play the patent game with one of their own suppliers - what else do they expect in response.  I can understand both points of view, but at the end of the day both companies are there for one purpose and thats to make money and grow shareholder value - its pretty clear they need each other right now so I guess its just a matter of how they share the proceeds of the success the products they make are enjoying.  I can imagine being a supplier to Apple is a tough gig, I suspect Apple can emanate a certain degree of self-ritiousness and arrogance, just like Samsung can when selling flat screen TV's to retailers.  six of one...

In many ways, the dispute is a non-issue for customers (of which I am one), it makes interesting news I suppose and no doubt Apple will do everything it can to find an alternative long term supplier or even start making their own chips.

Gerry

[saturation]

Since Apple sued them for patent infringement, yet this was not well publicized in the EE press:

http://www.webpronews.com/apple-htc-settle-all-their-patent-lawsuits-2012-11

I guess it 'balances' the books between them and now enemies are friends once again?

[Fluxed Matter]

No big deal for Apple because they are already working with TSMC to manufacture their processors going forward. Soon they will just cut Samsung off completely.

[G7PSK]

This is on Apple's UK web site so they only win in the US with a biased court.
Samsung / Apple UK judgment

On 9 July 2012 the High Court of Justice of England and Wales ruled that Samsung Electronic (UK) Limited’s Galaxy Tablet Computers, namely the Galaxy Tab 10.1, Tab 8.9 and Tab 7.7 do not infringe Apple’s Community registered design No. 0000181607-0001. A copy of the full judgment of
the High Court is available from www.bailii.org/ew/cases/EWHC/Patents/2012/1882.html.

That Judgment has effect throughout the European Union and was upheld by the Court of Appeal of England and Wales on 18 October 2012. A copy of the Court of Appeal’s judgment is available from www.bailii.org/ew/cases/EWCA/Civ/2012/1339.html. There is no injunction in respect of the Community registered design in force anywhere in Europe.

[vis1-0n]

Good on Samsung for squeezing all that they can out of Apple. They must know that they were on the way out. They are now selling a lot more smartphones, and are making better mark up with their premium retail phones than when cutting their throats on their wholesale price to Apple.

[poptones]

Well, I have to wonder what Apple was doing from the start of this patent. Surely they expected retaliation from suing one of their own suppliers? I wonder who much of a percentage this affects the cost overall? Maybe 4 or 6 percent reduction in profits on select items? Certainly not a good thing for apple.

[Simon]

so now apple will have a genuine reason for dodging tax

[NEDM64]

Well, I have to wonder what Apple was doing from the start of this patent. Surely they expected retaliation from suing one of their own suppliers? I wonder who much of a percentage this affects the cost overall? Maybe 4 or 6 percent reduction in profits on select items? Certainly not a good thing for apple.

Surely not.

But apple is a huge costumer.

Samsung are far from the only ones who can make CPU's for Apple.

They'll be losing the contract from Apple, that's for sure. They seem betting their farm, and they don't have a differentiated product... not a good thing.

[tom66]

The chip costs $17.50. That's an extra $3.50. Woopee-do-dah. Really going to hurt Apple. They've got a $442 margin on every iPhone 5 16GB sold.

http://www.isuppli.com/Teardowns/News/pages/Many-iPhone-5-Components-Change-But-Most-Suppliers-Remain-the-Same-Teardown-Reveals.aspx

Kinda makes me wonder if they could move production from China, at the expense of maybe $20-30 less profit.

[poptones]

That's what I meant. This 20% rise in price can't be affecting Apple's bottom line in any serious fashion, it seems the larger cost of their items would be the lcd and manufacturing and shipping.

[saturation]

IIRC, the damages on the lawsuit was ~ $1B.

For $3.50 increase per chip x 200M chips, $700M increase.