I’ve been reading these news stories all over, all day: Samsung will stop shipping displays to Apple for iOS devices. It’s no shocker that Samsung displays won’t be in iOS devices come the new year. In fact, I’m more surprised that it took this long for something like this to happen given the recent history between the two companies.
Something about this whole story just seems off to me though. Everyone and their brother is reporting on this story out of Korea and they are just drawing the wrong conclusions from it. Samsung couldn’t have possibly dropped Apple, because Apple had already dropped them.
The story starts off like Samsung gave Apple the finger, but the real story is right there to read. Lets look at this quote that starts the whole thing off:
The display panel manufacturer plans to completely cut its years-long business ties with Apple as it believes its American partner is no longer a cash-generator due to the iPhone maker’s stiffer supply-chain management structure.
That certainly does make it seem like Samsung has had it with Apple and the relentless squeeze that they put on their suppliers. Apple has squeezed Samsung so much that the margins are too thin to be worthwhile. But that isn’t what is happening at all. The very next paragraph makes it all crystal clear:
The Cupertino, California-based firm has been lowering its reliance on Samsung-manufactured displays for use in its popular i-branded devices as it is leveraging its influence to source components from Samsung’s rivals attracted by better pricing.
Apple quit Samsung. It’s as simple as that. Need more evidence? OK, here you go:
Samsung Display was the top supplier to Apple as of the end of the first six months of this year, shipping over 15 million LCDs, followed by its biggest rival LG Display with 12.5 million and Japan’s Sharp with 2.8 million, said market research firm DisplaySearch.
“But Samsung shipped less than 3 million to Apple during the third quarter of this year and we expect the quarterly shipment in the fourth quarter to fall to some 1.5 million,” said the source, who is directly involved with the matter.
Samsung Display didn’t provide panels for Apple’s new iPad — tentatively named the iPad Mini.
Apple couldn’t call LG or Sharp and ask them for 15 million more displays in a week, or even a month. That’s a massive increase in production, and there is ramp up time to hit that kind of volume. It seems like that time was up around June or July. Not only is Apple ordering fewer displays from Samsung, none of the reduced number of panels will be used in the mythical iPad Nano.
C|net ran a story tonight in which Samsung denied the entire affair, claiming to still be supplying Apple with their displays. That much is still true, but the story also says that Apple is moving away from Samsung as a supplier for their iOS devices.
But Samsung quit Apple.
Source | The Korea Times