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Samsung wants to replace Apple as a customer with upstart Chinese smartphone producers

Posted: , by Alan F.

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Samsung wants to replace Apple as a customer with upstart Chinese smartphone producers
Just as inside every box of Cracker Jack there is a prize, inside every Apple iPhone is a Samsung produced chip. But as you know from reading PhoneArena daily, Samsung and Apple aren't exactly BFFs. At a time when Samsung is increasing capacity at facilities that produce chips like the plant in Austin, Texas, Apple is looking to distance itself from the Korean based manufacturer. So what is Sammy going to do with all of that extra chip making capacity?

Samsung just introduced its Exynos 5 Octo chip

Samsung just introduced its Exynos 5 Octo chip

Stephen Woo, president of Samsung's System LSI business, which provides Apple with the processors for iOS devices, says that Samsung will look to add some Chinese smartphone manufacturers to its customer list. Goldman Sachs estimates that despite the animosity between the two firms, Samsung's AP chip sales to Apple will amount to 9.3 trillion won ($8.8 billion USD) this year although the investment firm sees that figure dropping to 2.5 trillion won next year. Goldman Sachs sees Apple cutting its AP spending with Samsung by 30% next year and by 80% by 2017.

As mentioned, Woo is looking to Chinese smartphone manufacturers to replace Apple's business. Meanwhile, Meizu's MX smartphone uses Samsung's Exynos quad-core processor and Lenovo's K860 also has an Exynos processor under the hood. The problem for Samsung is that it is still dependent on sales to Apple and the use of its Exynos line for the Samsung Galaxy S III and other high-end Samsung models.

One area where Samsung might buy its way into is baseband, which works with the radios in a mobile device. Woo said that the company is looking for possible acquisitions in this area and considers it an important area. Qualcomm is the current market leader with 50% market share. Woo adds that Samsung is not interested in trying to crack the desktop or server market controlled by Intel. Woo said, "For the time being, our focus will pretty much be on enhancing our AP offering, especially for high-end mobile devices." 

"(We) should diversify our customer base and are making such efforts already, adding some Chinese customers...We see emerging players who have potential to grow in smartphones and we will continue to make efforts to supply them with our chips...Baseband is a very important segment, but we don't have it. Given its importance, we're reviewing various options."-Stephen Woo, president, Samsung's System LSI business

Earlier on Thursday, Samsung introduced its new 8 core Exynos 5 Octa processor. While 4 cores do the heavy lifting, the remaining 4 handle light housekeeping to conserve battery life.

source: Reuters

12 Comments
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posted on 09 Jan 2013, 22:58 3

1. Izzy_V (Posts: 216; Member since: 07 Jul 2012)


Cool beans.

posted on 09 Jan 2013, 23:37 3

4. MeoCao (unregistered)


This is not that easy for SS to pull it off. The problem is the OEMs depend heavily on chip makers for the whole package: chips, modems, software... That's almost half the device or even more.

But SS competes directly with those OEMs and I don't think many of them will be comfortable using SS chips.

The irony is Apple is the manufacturer that can feel secure the most using SS manufactured chips b-c Apple design the chips themselves.

posted on 10 Jan 2013, 13:54 1

11. AnTuTu (Posts: 670; Member since: 14 Oct 2012)


Good for Samsung :)

posted on 09 Jan 2013, 23:02 2

2. nasznjoka (Posts: 324; Member since: 05 Oct 2012)


tit 4 tat

posted on 09 Jan 2013, 23:12 4

3. gallitoking (Posts: 4684; Member since: 17 May 2011)


I love Exynos... On my iphone... Thats all l am going to say

posted on 09 Jan 2013, 23:53

5. Hunt3rj2 (Posts: 396; Member since: 11 Nov 2011)


Exynos and Apple Ax have no relation after A4.

posted on 10 Jan 2013, 10:17

7. networkdood (Posts: 6260; Member since: 31 Mar 2010)


if you place that processor in a high powered Android phone, you may not like it, but glad to hear it...

posted on 10 Jan 2013, 18:26

12. billybuttpounder (banned) (Posts: 105; Member since: 28 Dec 2012)


Good, shut up then.

posted on 10 Jan 2013, 00:24 4

6. tmcr7 (Posts: 152; Member since: 02 Nov 2011)


With Samsung chips, Chinese products will improve in quality, killing the iPhone in China using an inferior processor.

posted on 10 Jan 2013, 10:18

8. networkdood (Posts: 6260; Member since: 31 Mar 2010)


so, it will improve its quality by using an inferior processor? Yep, that makes sense ...

posted on 10 Jan 2013, 10:20

9. networkdood (Posts: 6260; Member since: 31 Mar 2010)


Well, this situation is all APPLE's fault. Did any of you really expect Samsung to continue doing business with a company who is suing them for things like having a rectangular phone?

posted on 10 Jan 2013, 12:01

10. CreeDiddy (Posts: 225; Member since: 04 Nov 2011)


You need to go back in time to the Galaxy S with TouchWiz. There were similarities to the icons, etc...There is no denying that. Samsung was smart to move away from the interface of iOS. Functionality was different b/c of Android 2.1-2.3 than iOS, but their was influence of the iPhone. You don't say that now b/c of the Galaxy S3 success, but lawsuits are filed months prior to the hearing, in which 2012 was a big win for Apple.

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