Comment by revelation
13 years ago
I think you are overestimating how much Samsung needs Apple as a customer. Gigantic companies as Samsung are simultaneously active in any number of large markets. They do not need single customers, they do not even need whole markets. They are essentially investment holdings that will move out and into markets as they mature or are commoditized.
And if Samsung unilaterally ends their relationship with Apple it sets a dangerous precedent. If you knew that your trading partner would end their sale of products to you because you had a (valid or invalid) suit against one division of their business or had a product suite that competed with one of their division's product suites, would you want to do business with them or would you find someone that can actually play well with others?
How would you determine whether or not that was true about the next company? What about business that is ended between companies due to overlapping interests? That happens all the time.
Those were outside the hypothetical that was proposed (namely that Samsung could give up Apple as a customer and not notice it - presumably meaning longterm). Sure companies end relationships when they have overlapping interests, but sometimes they prop each other up as a result of that as well - see Microsoft's support of Apple in 1997, monetarily and with product support. It was apparently to their benefit to support a (failing) competitor, in this case I'm guessing it was to do with the anti-trust charges. But they were competitors at the same time.
In this particular case though (Samsung/Apple) the overlapping interest is part of Apple's core, and just one of many Samsung divisions. It would not be (or at least it's not obvious that it would be) in Samsung's interest to poison the well of their component division just because it happens that their phone division competes with Apple. Ditching Apple may not, on its own, be an issue after a couple years, but it would put other component customers on edge. See the concern some Android phone manufacturers had when Google bought Motorola's mobile division for a similar issue but from the software side.
The two businesses that Samsung is in that are making almost all of their money right now are semiconductors (and only flash and SOCs) and mobile handsets. Take those two businesses away and Samsung starts to look more like the ponderous, government-sheltered behemoth that it is.
And someone is going to take away the handset business - everyone in asia is basically waiting for Huawei and ZTE to eat Samsung's lunch. Samsung can't compete with either of them on cost, and eventually they won't be able to pump more pixels into 400+ppi screens to keep customers from buying cheaper smartphones. And without unique software to offer consumers (like Apple), Samsung is extremely vulnerable in the handset market.
And in the meantime, Samsung is amortizing a fortune's worth of chips fabs that were mostly built to supply components for iDevices.
Yes, Samsung needs Apple's business.
I think it's a bit more nuanced than you are making out.
Samsung do have their own Software (Tizen, and Bada(?), and a third 'unknown' base). They are pushing for an Android compatible linux, with strong hardware integration. Huawei and ZTE won't be able to compete with that. They could fail completely on that strategy, but they are doing more than just increasing PPI.
Neither Tizen nor Bada are realistic competitors for Android outside of Korea. Certainly not anymore than Meego was an Android competitor - and Nokia actually had a lot of really great software engineers working for them. That's something that's hard to say about Samsung considering Touchwiz. And neither Bada nor Tizen has any significant ecosystem of apps.
This isn't a competitive edge against Huawei and ZTE because no one buys Samsung phones for their software.
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They would lose billions, maybe 10 to 20 billions a year from Apple.
Nobody would seriously end this relationship from Samsungs end, at least if they had any brain cells.