Samsung Display said to terminate its contract as Apple supplier next year

Samsung Display said to terminate its contract as Apple supplier next year
Samsung and LG have been chief suppliers of screens for Apple's gadgets since the dawn of the mobile revolution five years ago. When troubles arose with the elaborate "Resolutionary" display of the new iPad, Samsung picked up the initial slack from the other manufacturers which were struggling with yields, but later on LG and Sharp caught up.

Samsung is still the largest Apple screen supplier, with the first six month of this year alone shipping 15 million panels to One Infinite Loop. The second half of the year saw a dramatic decrease, though, said the source: "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."

Now all this seems to be coming to an end, as one unnamed Samsung Display exec allegedly said his company will be terminating the contract with Apple next year, due to the changed relationship with suppliers Cupertino is imposing - the price per pixel from the iPad 2 to the new iPad has fallen more tahn twenty times for suppliers. Well, that, and one unfortunate lawsuit, too, we'd wager to guess., though here is the official's statement:



Apple is already rumored to search for an alternative to Samsung's processor foundry that supplies the silicon in the iPhones and iPads, and a diversified screen supply chain away from Samsung also seems to be in the cards for next year.

Samsung racks up a huge revenue stream from Apple, supplying it with screens, processors and memory chips, but the profit from these is not much compared to the margins it commands on its own handsets anyway. The Koreans have allegedly said the loss of Apple as an LCD screen customer will be somewhat offset by new orders from the likes of Amazon. Cutting supply relationships won't be the end of the world for both companies, it seems.

source: KT

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43 Comments

1. AstronautJones

Posts: 305; Member since: Aug 01, 2012

Probably the best for both, considering current relationship. Like being a business partner with an ex-wife, not the best idea.

7. alfiehp21

Posts: 17; Member since: Aug 29, 2012

You nail it!! Literally

15. Nathan_ingx

Posts: 4767; Member since: Mar 07, 2012

I'm thinking what took Samsung so long to notice that they have been 'tech-handled' the day Apple started the patent wars? About darned time!!! Time to see what Apple comes up with. Observing mode activated!

17. PhenomFaz

Posts: 1236; Member since: Sep 26, 2012

Its best for Sammy as there was too much of bad blood between the two. Now apple has to hunt for suppliers and find one that can deliver the quantity at the price which samsung was offering. I think Apple'll have a tough time as display production is huge for samsng and they could afford to supply Apple with huge orders at minimal margins. As far as what Apple is going to be coming up with...I am going to go out of my way here and say more sub-par handsets with even worse displays :)

21. JeffdaBeat unregistered

I didn't think this was much of a news flash...but Apple has been getting their LCDs from LG and Sharp as of recent. While at the top of the year, Samsung was the only producer, Apple soon brought in LG and Sharp. Most of the displays are now made by LG. Samsung LCDs have been reduced dramatically. Apple will be just fine. Like I said before, this will be a hit to Samsung because Apple was guaranteed business and their number one client. But as you guys said, Samsung and Apple's relationship has been strained probably more than Apple and Google. It's not good to be in the pocket of your competitor.

37. networkdood

Posts: 6330; Member since: Mar 31, 2010

This is not a hit to Samsung, because they will need the supplies for their own products, which are selling very well.

40. Hemlocke unregistered

Samsung makes a lot of A6-toting devices equipped with IPS LCDs?

43. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

If apple doesn't order more they're not going to keep making them. And since they're only producing what apple ordered, their current stock is already sold. But nice try on the sarcasm.

38. PhenomFaz

Posts: 1236; Member since: Sep 26, 2012

moreover samsung has other clients that it supplies to with a bigger profit margin...i know apple had the numbers to provide to samsung with minimal profit margin though, this means sammy can now focus all that qulaity time on selling more displays with a higher profit margin to other clients and for some innovation as well. as far as apple base goes, it was turning out to be more strenuous for sammy rather than profitable

19. -box-

Posts: 3991; Member since: Jan 04, 2012

Hope more companies follow suit. While sales are good, most of these suppliers make their own stuff, and if they do not renew their contracts, apple is stuck, and folks can choose from the suppliers' products instead

41. Nadr1212

Posts: 741; Member since: Sep 22, 2012

hah, Phonearena mispelled than in the 3rd paragraph

2. MeoCao unregistered

Nothing will change dramatically, Apple with their high volume has great power and suppliers do not earn much, in fact few can get much benefits working with Apple.

3. Bluesky02

Posts: 1439; Member since: Dec 05, 2011

In short "We're getting rid of them as soon as possible"

31. cheetah2k

Posts: 2185; Member since: Jan 16, 2011

I feel for Apple users now. They can forget about quality hardware in their precious devices..

4. PowTheBowl

Posts: 86; Member since: Apr 19, 2012

Hoping to see Apple make all the parts for their products soon, without the help from Samsung, LG, Sharp, and other companies who make parts for Apple's products.

5. Kan_wha

Posts: 88; Member since: Jun 25, 2012

and watch the price of Apple products double if not triple.

9. nofear

Posts: 151; Member since: Jun 22, 2012

You are 100% correct! but I am 100% is not going to buy it a product over price and outdated stuff any way.

6. ajac09

Posts: 1482; Member since: Sep 30, 2009

and start to have even more quality issues

11. Aeires unregistered

When has Apple made all their own parts?

20. -box-

Posts: 3991; Member since: Jan 04, 2012

@Aeires Never that I know of. Always buying off-the-shelf components or having someone else make them. Arugably when Woz and jobs were making them in garages, but those were still off-the-shelf components

22. Aeires unregistered

My thoughts as well. To the best of my knowledge, they may design them, but that's as far as it goes.

26. JeffdaBeat unregistered

That's correct. In a nutshell, Apple designs the product, get components from different suppliers, and puts all the pieces together at Foxxcon. Not unusual. *Roller coaster nerd alert* Arrow Dynamics designed roller coasters, but went to Morgan Manufacturing to manufacture and build the ride. Same goes with cars. Rarely is the design firm the same as the builders.

27. Aeires unregistered

Agreed. Cars assembled in the U.S. are becoming the norm, but in reality they are manufactured all over the place. Global economy has changed a lot, it's not just Apple doing things overseas, it's all the big corporations. *Rollercoaster nerd, lol. I thought the correct term was Rollercoaster offianado. ;-)

39. PapaSmurf

Posts: 10457; Member since: May 14, 2012

+1 to you. -Roller coaster nerd/enthusiast

32. cheetah2k

Posts: 2185; Member since: Jan 16, 2011

Apple has never made their own parts, which is why they're able to make massive profits on their devices.. The moment they start making fab lines, will be the day Apple flushes itself down the toilet

13. Topcat488

Posts: 1411; Member since: Sep 29, 2012

Then what you're hoping for, is a failed product from Apple... Apple until now has made practically nothing on the iphones, on their own... When they tried look what happens (imaps and such), Apple only takes the credit for what other companies done for them. Give credit where credit is due, but don't say i built this, when others built it for you. Apple is a Chinese product, not built in America...

14. xtremesv

Posts: 299; Member since: Oct 21, 2011

Dream on! In essence Apple is a marketing company with a lot of cash to threaten suppliers. Samsung won't play their game anymore.

30. GoBears

Posts: 456; Member since: Apr 27, 2012

Yeah right. They don't "make" anything.

8. nofear

Posts: 151; Member since: Jun 22, 2012

I'd expected that Samsung could have done sooner than that. Just the boat without a sail.

10. redmd

Posts: 1910; Member since: Oct 26, 2011

soon we'll have idevices with display issues. lol

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