While Apple and Samsung may be at war in the court rooms around the world, they also have a symbiotic business relationship. Samsung makes critical components for Apple’s iPhone such as the processor, DRAM etc., while Samsung parts division generates billions in revenues thanks to the component contracts from Apple.
But we’re hearing that the relationship between the two companies has evolved from a “love-hate” relationship into a “hate-hate” relationship. It doesn’t come as a surprise that the patent war in the court rooms around the world is contributing to the meltdown in the partnership.
According to reports, Apple has taken steps to lessen its reliance on Samsung with the A6 processor. Apple did not work with Samsung on the development of its new A6 processor, which powers Apple’s new iPhone 5 and simply used them as a foundry to manufacture the chip. Samsung had apparently contributed to the design and development of processors used in previous generation iPhones. The rift has already extended to other components, as Apple has reduced memory chip – both dynamic random access memory (DRAM) chips and NAND memory chips orders to Samsung for the iPhone, iPad and iPod touch.
Here’s another reason why Apple is looking to reduce its reliance on Samsung. Korean website DUAM reports that Samsung recently hiked the prices of the Application processor (AP) by 20%. The report claims that Apple was forced to accept the price hike as it had failed to find another supplier for the chips.
The report also notes that Apple had purchased chips worth $130 million from Samsung last year and should cross $200 million this year. The report goes on to add that Samsung has a long-term contract to supply the chips to Apple until 2014.