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(Tech Crunch)   Apple: Samsung, pay us for court settlements Samsung: 20% price increase on mobile processors seems fair about now   (techcrunch.com) divider line 119
    More: Obvious, Apple Inc., Samsung, court settlements, ipad mini, processors, mobile processors  
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5138 clicks; posted to Geek » on 12 Nov 2012 at 2:25 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-11-12 02:29:05 PM
HA-HA.jpg
 
2012-11-12 02:31:20 PM
Apple doesn't play well with others.
 
2012-11-12 02:36:09 PM
Why not just refuse to sell to them. In fact sell to their competition instead.

Thats what I would do if you sued me.
 
2012-11-12 02:41:21 PM
i.imgur.com 
Time for Apple to take its medicine again.
 
2012-11-12 02:42:16 PM

Warlordtrooper: Why not just refuse to sell to them. In fact sell to their competition instead.

Thats what I would do if you sued me.


Know how I can tell you're a gentile?

Because then you lose out on a bunch of potential sales. I'd do exactly what Samsung is doing. Raise prices just as high as I could under the current contract while telling my sales team their new mission is finding business to replace them at the end of the contract.

That way Apple gets your middle finger, but you also walk away with a bunch of their cash. Oh, and anything Apple wanted to buy from me in the future would be a little pricier too. That's the cost of doing business like a dick.
 
2012-11-12 02:42:57 PM

Warlordtrooper: Why not just refuse to sell to them. In fact sell to their competition instead.

Thats what I would do if you sued me.


Cause there's no other buyer for the already-made chips, or the entire manufacturing output.

That would be cutting off Samsung's nose to spite Apple, Apple would just throw it back while Samsung shouts FOR EDITH.

/Obscure?
 
M-G
2012-11-12 02:44:48 PM

mongbiohazard: Because then you lose out on a bunch of potential sales. I'd do exactly what Samsung is doing. Raise prices just as high as I could under the current contract while telling my sales team their new mission is finding business to replace them at the end of the contract.


And they already know that Apple is looking to get someone else to fab their chips, so you may as well milk them for all you can now.
 
2012-11-12 02:49:09 PM
Only 20%? I would have made it 50!
 
2012-11-12 02:55:08 PM
Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?
 
2012-11-12 02:59:17 PM

bingethinker: Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?



You are the first paid shill to show up.
 
2012-11-12 03:05:28 PM

Martonio: Only 20%? I would have made it 50!


One biiiiillion dollars.
 
2012-11-12 03:08:03 PM
Don't get so lost in the nebula of hating Apple that you forget why Apple is getting shiattier. Locking devices down like that should be criminal.
 
2012-11-12 03:11:29 PM
I called this a month ago. A guy I know said I was dead wrong, Samsung would *never* do that.

Honestly? I wouldn't be shocked if Samsung jacked their prices even farther just to see how much Apple with pay. If Apple went ahead and said "fark you" to Samsung, it could effectively mean the end of a lot of support for any Apple product with the Samsung chip in it once new products come out by not just Apple, but developers as well. With Apple's strategy of "buy a new product every few months or else you're an out of touch tool" pushing users to always buy the latest and greatest, there's no reason to think they will support even current tech once they roll out new processors, and developers won't bother writing programs that will run on them either, especially if Samsung is smart and won't license the tech to another company to make processors that are compatible with current apps. That lawsuit will end up costing Apple a lot more than bad PR and time spent.

Quick, Samsung! Put through a patent with chipsets having square corners!!!!
 
2012-11-12 03:21:11 PM

bingethinker: Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?


Projecting: It's not just for movie theatres.
 
2012-11-12 03:24:27 PM
Hay guyz, Apple is to blame for everything.
 
2012-11-12 03:28:03 PM

bingethinker: Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?


Yes. It's the ANTI-APPLE crowd that is full of paid shills. Yessirreee...
 
2012-11-12 03:50:29 PM
Wait. Samsung makes shiat for apple iOS devices?
 
2012-11-12 03:55:52 PM

SacriliciousBeerSwiller: bingethinker: Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?

Yes. It's the ANTI-APPLE crowd that is full of paid shills. Yessirreee...


It has to be either money or just stupidity that has people white-knighting a corporation like Samsung. Its history and business practices make Apple look like [fill in the blank with a company that practices good citizenship].
 
2012-11-12 03:55:54 PM

Warlordtrooper: Why not just refuse to sell to them. In fact sell to their competition instead.

Thats what I would do if you sued me.


What is to stop Apple from giving them the finger and getting processors from someone else for their next generation of iStuff? Don't forget Motorola's experience.
 
2012-11-12 03:58:45 PM

TheTrashcanMan: Wait. Samsung makes shiat for apple iOS devices?


They make the processors and chipsets. The very heart of iOS devices. I believe they used to make apples displays as well. (but don't quote me on that)

Apple... really hasn't been acting terribly smart since the whole "thermonuclear war" thing.
 
2012-11-12 04:03:55 PM

Crotchrocket Slim: Warlordtrooper: Why not just refuse to sell to them. In fact sell to their competition instead.

Thats what I would do if you sued me.

What is to stop Apple from giving them the finger and getting processors from someone else for their next generation of iStuff? Don't forget Motorola's experience.


This is exactly whats happening. Samsung said we are not selling to you past this contract, oh by the way, the price is going up. So apple said FARK YOU were taking our ball and going ... ohh these guys dont make the chips we need... ohhh neither do these guys .. or them... or these ones either... and it would cost us 50 times that to start up our own chips company ... fark it and went back check in hand to samsung and sucked up their spooge.

Thats why they ARE looking to that Taiwanese micro processesor company to pick up the next contract. the problem was that they couldnt do it in time without a supply disruption. And the hilarious part will be in the future when the quality of the apple products drops significantly. Hearing all the hipsters claiming ITS NOT TRUEEEEEE as their 4 day old iphone bricks itself on a faulty chip.
 
2012-11-12 04:07:52 PM

TheTrashcanMan: Wait. Samsung makes shiat for apple iOS devices?


Apple bit the hand that fed them, hard. They won in a court here, but since then, have been forced by an international court to have a public apology on their website to Samsung, have had a shiatload of bad PR, fired two top executives and are starting to see what biting the hand that feed their products does. Their stocks are so unstable and people so nervous about them that they had their prices drop almost $40/share in two days because a guest on CNBC declared they "lost their mojo". The products they are recently releasing are things that Jobs was vehemently against (7" tablets? Never in his company), and the even their marketing for those is weak sauce compared to how they used to glamorize their product lines (according to Apple SVP of Design Jony Ive, the Mini is a completely new product and a "concentration" rather than a "reduction, going on to say "...so when we made the iPad Mini, we wanted to make sure it had all the features that make iPad so magical."). Either they are slacking hardcore in the marketing segment, or honestly believe their users are so dumb as to believe their products are magic.

Apple seems to be falling from the tree quite fast.
 
2012-11-12 04:10:18 PM
so basically Apple isn't going to use Samsung in the future for hardware manufacturing

not sure how this whole ordeal benefits anybody, both sides are cutting their own noses to spite their faces by winning patent battles that benefits nobody and pushing away clients with price hikes

what's the future of the smartphone at this point? Samsung-Lenovo-Apple-Microsoft? each with closed patent-trolling systems? each with their own manufacturing bases in whatever tax-haven foreign country?

feels like the 90's and the PC space race all over again, at some point we reach market saturation and creativity and marketability hitting a wall and then somebody comes up with the next big thing and it starts all over again
 
2012-11-12 04:12:09 PM

fluffy2097: They make the processors and chipsets. The very heart of iOS devices. I believe they used to make apples displays as well. (but don't quote me on that)


I believe they do, yes. So, technically, doesn't Samsung have a bit of say in that whole "Retina Display" thing as well?

Christ... they can cripple Apple if they pull their tech out and say "fark off". It'll financially hurt Samsung in the short run, absolutely, but they could very well end the entire Apple mobile product line in one fell swoop.
 
2012-11-12 04:18:17 PM

RoxtarRyan: Christ... they can cripple Apple if they pull their tech out and say "fark off". It'll financially hurt Samsung in the short run, absolutely, but they could very well end the entire Apple mobile product line in one fell swoop.


They could, but they have contracts with apple, and it would reflect poorly on samsung to back out of those contracts.

The fact that Samsung is willing to continue to supply hardware as dictated in their contract shows other businesses that they can be trusted to hold up to those contracts. By jacking up the prices as much as the contracts allow, it also shows that Samsung won't take any crap. By putting up with Apples nonsense and simply charging them for it, they come away with a shining reputation and a pile of cash.
 
2012-11-12 04:20:05 PM

RoxtarRyan: fluffy2097: They make the processors and chipsets. The very heart of iOS devices. I believe they used to make apples displays as well. (but don't quote me on that)

I believe they do, yes. So, technically, doesn't Samsung have a bit of say in that whole "Retina Display" thing as well?

Christ... they can cripple Apple if they pull their tech out and say "fark off". It'll financially hurt Samsung in the short run, absolutely, but they could very well end the entire Apple mobile product line in one fell swoop.


sounds like a great reason never to do business with Samsung
 
2012-11-12 04:26:48 PM

theflatline: bingethinker: Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?

You are the first paid shill to show up.


Just FYI:

Bingethinker = Apple Bevets or iBevets, if you prefer.
 
2012-11-12 04:32:02 PM

AdamK: sounds like a great reason never to do business with Samsung


Or sue someone that supplies the very heart of your products for a minimum of $1B because of round corners. Biting the hand that feeds and all.
 
2012-11-12 04:36:04 PM

RoxtarRyan: I called this a month ago. A guy I know said I was dead wrong, Samsung would *never* do that.

Honestly? I wouldn't be shocked if Samsung jacked their prices even farther just to see how much Apple with pay. If Apple went ahead and said "fark you" to Samsung, it could effectively mean the end of a lot of support for any Apple product with the Samsung chip in it once new products come out by not just Apple, but developers as well. With Apple's strategy of "buy a new product every few months or else you're an out of touch tool" pushing users to always buy the latest and greatest, there's no reason to think they will support even current tech once they roll out new processors, and developers won't bother writing programs that will run on them either, especially if Samsung is smart and won't license the tech to another company to make processors that are compatible with current apps. That lawsuit will end up costing Apple a lot more than bad PR and time spent.

Quick, Samsung! Put through a patent with chipsets having square corners!!!!


Apple is designing the A-series chips, and Samsung is just fabbing them, so there is really no way they can stop Apple from using another fab for their CPUs. Not to mention all of the key microaechitecture is licensed from ARM and PowerVR anyway. LG is also already chomping at the bit to make displays for Apple, and flash memory is a commodity item. There's really not much Samsung can do to screw Apple over long term.
 
2012-11-12 04:36:15 PM

poisonedpawn78:
Thats why they ARE looking to that Taiwanese micro processesor company to pick up the next contract. the problem was that they couldnt do it in time without a supply disruption. And the hilarious part will be in the future when the quality of the apple products drops significantly. Hearing all the hipsters claiming ITS NOT TRUEEEEEE as their 4 day old iphone bricks itself on a faulty chip.


TSMC could easily do it. But they would rather have many smaller customers than one large. If they had most of the production doing stuff for Apple they would not only be dependant on something they couldn't control, the fortunes of Apple, but Apple could also preassure them on prices, which Apple would.

So TSMC will always prefer to only be able to sell 80% of their capacity to numerous customers, than having 100% of the production sold, with 80% of that being Apple.
 
2012-11-12 04:41:31 PM

fluffy2097: The fact that Samsung is willing to continue to supply hardware as dictated in their contract shows other businesses that they can be trusted to hold up to those contracts.


Wonder how long those'll last... Either way, I think that within the next couple years (if that), we'll see brand new Apple products with new chipsets, with either Samsung or Apple choosing not to renew. Thing is, I wonder if Apple will drop support for the older chipsets, or if they will essentially double their tech support to support both chipsets, port apps, etc. etc. They could be a hero in the long game if they decide to increase their staff to support both and hire all the workers here in the USA, touting themselves as a job creator because the big, bad foreign company isn't making their chips anymore.

Interesting to see where this leads.
 
2012-11-12 04:43:09 PM

Mad_Radhu: Apple is designing the A-series chips, and Samsung is just fabbing them, so there is really no way they can stop Apple from using another fab for their CPUs.


No kidding... I thought I read somewhere Samsung owns the design, etc. etc.
 
2012-11-12 04:45:59 PM

RoxtarRyan: Quick, Samsung! Put through a patent with chipsets having square corners!!!!

RoxtarRyan: Or sue someone that supplies the very heart of your products for a minimum of $1B because of round corners.


I wonder who's paying you to push this whole "corners" meme...
 
2012-11-12 04:51:27 PM

Mad_Radhu: Apple is designing the A-series chips, and Samsung is just fabbing them, so there is really no way they can stop Apple from using another fab for their CPUs. Not to mention all of the key microaechitecture is licensed from ARM and PowerVR anyway. LG is also already chomping at the bit to make displays for Apple, and flash memory is a commodity item.


Just to clarify for other people, Apple designed the Apple Ax (A4, A5, A6) chips. Not to be confused with the the Cortex-A series microarchitecture itself (commonly referred to as A5, A7, A8, A9, A15, etc.) For example, the Apple A4 is actually a Cortex-A9.

Mad_Radhu: There's really not much Samsung can do to screw Apple over long term.


Really? I thought it was called the Galaxy series :P
 
2012-11-12 04:51:54 PM

Diogenes Teufelsdrockh: theflatline: bingethinker: Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?

You are the first paid shill to show up.

Just FYI:

Bingethinker = Apple Bevets or iBevets, if you prefer.


Really? I have him just noted as "trolling bigot." Didn't know he was also an apple sodomite.
 
2012-11-12 04:52:19 PM

Theaetetus: I wonder who's paying you to push this whole "corners" meme...


Paying? Every time someone's eyeball twitches, I get a funny feeling in my pants. Doesn't happen very often anymore, so I take what I can get.
 
2012-11-12 04:52:45 PM

RoxtarRyan: fluffy2097: They make the processors and chipsets. The very heart of iOS devices. I believe they used to make apples displays as well. (but don't quote me on that)

I believe they do, yes. So, technically, doesn't Samsung have a bit of say in that whole "Retina Display" thing as well?

Christ... they can cripple Apple if they pull their tech out and say "fark off". It'll financially hurt Samsung in the short run, absolutely, but they could very well end the entire Apple mobile product line in one fell swoop.


Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.
 
2012-11-12 04:54:50 PM
Apple has been in the process of moving their CPU manufacturing to Taiwan Semiconductor Manufacturing Co. for a couple of years now.

"Apple began verifying TSMC's 20nm process in August this year and may begin risk production in November with the process," the report said. "Volume production is expected to start in the fourth quarter of 2013, raising the possibility that TSMC will hike capital expenditure to US$11-12 billion in 2013 and 2014."

Reports have linked Apple to TSMC for over a year now, but the company still relies on Samsung as its sole supplier of custom chips found in the iPhone, iPad, iPod touch and Apple TV. As such, a move to TSMC as Apple's sole supplier for a future chip would represent a major shakeup in Apple's supply chain.


Apple typically fronts manufacturers the money needed for production lines to build their components in return for deep discounts. Their last financial report mentioned an unexpected Billion dollars spent on just such a deal with a manufacturing partner which was not named.

The CEO of TSMC gave an interview earlier in the year when he mentioned his companies willingness to build a state of the art Fab and devote it to one customer.

Samsung is price gouging while they can because they know they are being cut out of the equation anyway. They have nothing to lose.
 
2012-11-12 04:56:05 PM

RoxtarRyan: fluffy2097: They make the processors and chipsets. The very heart of iOS devices. I believe they used to make apples displays as well. (but don't quote me on that)

I believe they do, yes. So, technically, doesn't Samsung have a bit of say in that whole "Retina Display" thing as well?

Christ... they can cripple Apple if they pull their tech out and say "fark off". It'll financially hurt Samsung in the short run, absolutely, but they could very well end the entire Apple mobile product line in one fell swoop.


Many companies have the right to make LCD screens of various types, there is a whole licensing and standards alliance. I don't think Samsung currently makes screens for Apple right now with Sharp and LG doing the bulk of the supply.

You can't think of Samsung like one company. They make basically everything and have manufacturing capabilities beyond many others. Things like mobile chips, memory and screens are ALMOST a fungible commodity now. Demand is outstripping supply and that is why Samsung can justify/force a price rise.

As much as Apple would probably like to cut Samsung out they just can't replace that kind of production easily. Kind of like US reliance on foreign energy.
 
2012-11-12 04:56:09 PM

Carth: Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.


Samsung's market cap is 182b+
 
2012-11-12 04:58:25 PM
For the record... I don't use a Samsung phone, or anything else. The only Samsung phone I had was the Charge, which was the biggest POS. Bluetooth was complete shiat (kept dropping connection every 15-20 minutes, requiring a re-pairing.. a biatch when you stream music through your phone to your car stereo and you had a 40 minute drive to college and work), and the GPS sensor was the worst I've seen, taking upwards of half an hour to lock onto a signal (confirmed by using 3rd party apps that it was just not locking). At the time, those issues were a problem across the Samsung product line, with Verizon and Samsung being aware of the problem and doing nothing about it, leading me back to getting a Motorola Bionic.

I'm just happy to see Apple getting slapped around a bit.
 
2012-11-12 05:00:59 PM

ProfessorOhki: Carth: Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.

Samsung's market cap is 182b+


True, but companies generally don't spend 100% of someones market capitalization when performing a takeover.
 
2012-11-12 05:02:09 PM

Faddy: You can't think of Samsung like one company. They make basically everything and have manufacturing capabilities beyond many others. Things like mobile chips, memory and screens are ALMOST a fungible commodity now. Demand is outstripping supply and that is why Samsung can justify/force a price rise.


Samsung is the company with the largest number of it's own parts in it's laptops and devices. Their laptops are over 80% Samsung with the CPU, Intel or AMD, being the biggest part they don't make
 
2012-11-12 05:02:17 PM

Carth: ProfessorOhki: Carth: Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.

Samsung's market cap is 182b+

True, but companies generally don't spend 100% of someones market capitalization when performing a takeover.


They usually don't spend 100% of their cash on hand either, do they?
 
2012-11-12 05:07:08 PM

Carth: Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.


Buying a company that does something completely different from anything your company does is a terrible idea, even if they had the money to do it (and no, Apple doesn't have the cash.)

Do you think it would be wise for Dominos pizza to Buy out the company that makes their ovens and go into the oven making business just because they had a personal vendetta against their oven supplier? What does a pizza company know about making ovens?
 
2012-11-12 05:07:24 PM

ProfessorOhki: Carth: ProfessorOhki: Carth: Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.

Samsung's market cap is 182b+

True, but companies generally don't spend 100% of someones market capitalization when performing a takeover.

They usually don't spend 100% of their cash on hand either, do they?


Of course not. Especially when you consider a 20% increase is equal to about $3.50 a device and in 10-12 months they'll likely be able to move over to TSMC. The loss of Apple as a long term client hurts Samsung more than a sub $4 increase hurts apple for less than a year.
 
2012-11-12 05:09:20 PM

Faddy: As much as Apple would probably like to cut Samsung out they just can't replace that kind of production easily. Kind of like US reliance on foreign energy.


Apple can and does pay for the factories it's manufacturing partners run to build the components Apple wants.

For instance, this is from the last fiscal year's financial report: The Company's capital expenditures were $10.3 billion during 2012, consisting of $865 million for retail store facilities and $9.5 billion for other capital expenditures, including product tooling and manufacturing process equipment, and other corporate facilities and infrastructure.

Apple has the cash on hand to very easily replace the factories they previously built for Samsung.

I would expect that by the time Apple's current manufacturing contracts with Samsung are up, they will have other facilities ready to go.
 
2012-11-12 05:13:14 PM
Great job biting the hand that feeds, Apple.
 
2012-11-12 05:17:19 PM

Carth: RoxtarRyan: fluffy2097: They make the processors and chipsets. The very heart of iOS devices. I believe they used to make apples displays as well. (but don't quote me on that)

I believe they do, yes. So, technically, doesn't Samsung have a bit of say in that whole "Retina Display" thing as well?

Christ... they can cripple Apple if they pull their tech out and say "fark off". It'll financially hurt Samsung in the short run, absolutely, but they could very well end the entire Apple mobile product line in one fell swoop.

Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.


That's why this is in the Geek tab, not the Business tab.

Geek logic: "Arrggh, I hate Apple, so I support anything that hurts them, even if only temporarily."

Business logic: "Apple is costing us a lot of money and this patent battle is a war of attrition with a much larger, cash-rich company. Let's do what we legally can to offset those costs while we figure out what to do when the supplier agreement is over in 2014."

Apple will be just fine. Samsung will be just fine. It's just going to reshape their balance sheets for a few quarters while they adjust to the new normal. When the dust settles, Sharp and LG will be the winners, along with a few fabs. I even doubt that Apple would pull 100% of the processor supply business from Samsung; it'll just be a lot lower than the "over 200 million processors" Samsung builds for them now.
 
2012-11-12 05:17:33 PM

Carth: Of course not. Especially when you consider a 20% increase is equal to about $3.50 a device and in 10-12 months they'll likely be able to move over to TSMC. The loss of Apple as a long term client hurts Samsung more than a sub $4 increase hurts apple for less than a year.


Also, let's face it, people expect to pay a gazillion dollars for an apple device. If the next iWhatever is about 150% as much as it should be if it didn't have the apple logo on it, that's just par for the course. I don't think the average apple consumer would even bat an eye at a $40 increase.
 
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