Comment by scrrr

13 years ago

Apple CEO has a glass of wine with Samsung CEO, laughing while reading fanboys of both companies fight about which company is best. wink

59 comments

scrrr

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ihsw  13 years 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.

  • yogrish  13 years 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  13 years 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.

      2 replies →

    • CountSessine  13 years ago

      Btw, Samsung is so massive and diversified that it is into areas like Construction, Ship Building, Finance, Automobile, Retail

      And the only one of them that's making big money right now is mobile. That's where most of Samsung's (and I mean the big diversified company, including building boats and selling insurance) income has been coming from the last 2 years.

      Samsung is very focussed on mobile right now.

      2 replies →

    • hclee  13 years ago

      In terms of income ratio of Samsung, it is so focused on mobile business. Samsung mobile business income may beat rest of all samsung conglomerate incomes. Apple has been the biggest customer for Samsung FAB. As Apple were pulling out, it became like factory without running. Not sure why Apple chose both TSMC and Samsung fabs, may be gaining some bargain power, TSMC is one of the best. Qualcomm takes on the most advanced process with TSMC. AP is designed by apple and they can always choose which fabrication facility to produce. Samsung FAB and mobile business are not in the same boat

  • revelation  13 years ago

    Huh? Is Apple running a fab in their backyard? What exactly do they own in terms of technology that others rely on?

    • georgemcbay  13 years 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.

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    • CountSessine  13 years 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.

    • Spooky23  13 years 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.

simmons  13 years ago

I don't think that really describes this situation (competitors in one product market are often supply chain partners in another). However, I can really relate to your comment. As someone who considers myself to be more on the producer side of the consumer electronics equation, I'm often perplexed at how many consumers make these brands part of their identity, the way people were really passionate about what kind of shoes to wear back in the 80's! This sort of consumer excitement probably does benefit the producers.

blah32497  13 years ago

But it's a fundamentally uneven relationship.

If Apple starts getting marketshare, Apple wins and Samsung wins.

If Android starts getting marketshare. Samsung wins and Apple loses.

I bet each production cycle Apple starts threatening it will manufacture its own chips and it starts to feed the rumor mill. Samsung gets nervous and gives them a very good deal.

Even if Samsung's profit margin drops significantly, it's still going to look much much better to the markets than if they lose their Apple contract.

  • Steko  13 years ago

    "If Android starts getting marketshare. Samsung wins and Apple loses."

    This is conventional wisdom and at some level of course it's true but in general I think it's misleading. The fact is that the markets Apple and Samsung are in are not identical. The market Apple competes in roughly equates with the top third of the smartphone market. Samsung competes in the entire phone market. It's quite possible for both to gain market share at the same time in their respective markets. And even if they weren't it's possible for both to lose market share but still be successful because the market for smartphones itself is increasing rapidly.

  • craigyk  13 years ago

    The way I look at it, is that Apple is trying to have its way by shopping between Samsung, TSMC, and any others. Their leverage doing this comes from offering bulk purchases, or in the case of LCDs, helping to finance large capital expenditures. Their biggest worry right now is that Samsung's competition doesn't seem able to compete, at least at scale.

    At the end of the day though, if push ever comes to shove, there isn't much they couldn't afford to buy outright, even their own fabs. I was holding out hope that they were trying to save 200B to build out their own wireless infrastructure, but they could conceivably buy control of Intel instead.

  • Einherji  13 years ago

    Keep in mind that the ARM processor space operates on razor thin margins, and Apple's iPhone business does not. Also it has been rumored for a long time that apple is moving most of its chip fab business to TSMC, but I suspect their waiting for the next process node before making the jump. A company that values reliability like apple prefers a mature process.

dominotw  13 years ago

Samsung has fanboys ?

  • jonnathanson  13 years ago

    I work with a fair number of (awesome!) Korean engineers, and I can say that yes, Samsung has a lot of fanboys. It's sort of like the Apple of Korea. It's also been gaining a lot of admiration from A/V enthusiasts in the States, having easily supplanted Sony as the high-end consumer electronics maker of choice for TVs and such.

    Samsung is a very impressive company. It doesn't use the Nike-esque marketing playbook Apple does, and as such, it doesn't inspire the hero worship or the fanaticism in the States. But it's been quietly building up a massive empire.

    [Full disclosure: I say this as an Apple fanboy, and as the resident iOS 7 apologist at my office (everyone here's firmly on Team Android). I own plenty of Apple and Samsung devices, and I don't feel the need to declare absolute brand loyalty to any one provider.]

    • moogleii  13 years ago

      It always amuses me to see how much vitriol comes from anti-apple folks, when, if they were living in Korea and held the exact same standards, they would likely have equal hate for Samsung. Their vertical and horizontal control on their home turf dwarfs Apple's. But no, it's just a foreign company that has managed to do wonders somehow. As a chaebol, Samsung got where they are now thanks to very favorable government assistance, that, if occurred here, would be considered pretty controversial.

      4 replies →

    • CountSessine  13 years ago

      Accounting for 20% of South Korea's GDP and having been involved in a number of bribery and wire tapping controversies with former Prime Ministers and government officials, Samsung is too big to fail and they know it.

      They are the Goldman Sachs of the electronics industry. The Korean government and the Korean people will never let Samsung fail. Having such a sturdy safety net means they can take some very bold risks and those have really paid off for them.

      2 replies →

  • Miyamoto  13 years ago

    I don't know about phones, but I know a lot of PC gamers swear by Samsung monitors. Also their SSDs are among the most popular right now.

    • hhandoko  13 years ago

      Yup, just got the 500GB Samsung 840 EVO to run my development VMs on it.

      It's TLC, so a bit slower and it won't last as long, but for almost 30% cheaper it's good value.

yapcguy  13 years ago

Reporters should ask Tim Cook the following question:

"Does Apple make anything which is best-in-class which other companies need?".

The answer is obvious. No.

> "Chipworks also found the new M7 motion coprocessor inside the iPhone 5s, which is labeled as the NXP LPC18A1. It's based on the LPC1800 series Cortx-M3 microcontrollers made by NXP. As for the enhanced camera in the iPhone 5s, the iSight module was discovered to be a custom Exmor-RS sensor from Sony. Other parts in the handset include a touchscreen controller from Broadcom, an LTE modem by Qualcomm, and NAND flash from SK Hynix."

http://appleinsider.com/articles/13/09/20/samsung-confirmed-...

  • Steko  13 years ago

    Best in class products from Apple which companies use include the iPhone, iPad and their laptops. If you're just pointing out that Apple isn't a component maker, I'm not sure what the point is other than trivia.

  • ek  13 years ago

    This is potentially a bit of a loaded question, since compare the following similar question:

    "Does Apple use any components which are best-in-class and unavailable to competitors?"

    The answer there is "yes", at least according to a bevy of evidence from the AnandTech review/benchmarks: http://anandtech.com/show/7335/the-iphone-5s-review.

    edit: To clarify, I mean this because the A7 is a custom design that just happens to be fabbed by Samsung under contract, rather than an off-the-shelf component, like the M7, that has simply been granted a marketing buzzword. Other OEMs will not simply be able to integrate the A7 in their products for this reason.