Popular Now: Dropping Dropbox? Here are Five Alternatives.

Share This!

Samsung Raises Chip Prices to Apple by 20%

Published by on Nov 13th, 2012, 9 Comments

We all know that Apple and Samsung have been at each other’s throats for a long time and it is definitely not going to change any time soon. The bitter reality for the companies, however, is that they still have business ties whether they want to or not. These two tech giants are still very dependent on one another.

With relations between the companies breaking down on several fronts, it’s only a matter of time before their business relationship ends. Samsung is very aware of this, and have decided to cash in while they still can. They are changing the terms of their contract to supply chips to Apple, and are now hiking the prices by 20% – but only for Apple. All other customers’ contracts have not been amended.

This comes from Korean daily newspaper Choson Ilbo, where they claim to have sources familiar with the ongoing negotiations between the firms. It has been reported that Apple actually wanted to walk away from the contract but no replacement manufacturer/supplier could be found in time. A 20% hike in critical components can make a huge difference to Apple’s bottom line, and investors are watching closely.

According to a report from mid-October, the Copertino firm has been in negotiations with TSMC, a Taiwanese company, to work on quad-core chips for both iPhones and Macs. The other possibility for Apple is another Taiwan-based company called Kinsus Interconnect Technology Corporation.

The current contract between Apple and Samsung ends in 2014, when we can expect them to cut all mutually beneficial ties. Perhaps then, the myriad of court cases will also come to an end, or perhaps it will spark more, it still remains to be seen.

What do you think of Samsung’s strategy to hike prices to Apple?

Comments

  • e1ace

    Do you really think that Apple would not have had a clause in the contract stopping Samsung from hiking the prices without them knowing about it.

    Business doesn’t work like that…

  • Theunis Jansen van Rensburg

    Apple absolutely knew about it, but as stated hadn’t prepared alternative sources for components and had to stick with Samsung.

  • TsongaGuy

    Its a way to drop Apple’s profits.

  • Rebel

    Apple’s screwwwwed

  • nic

    Apple is ironically paying themselves for the lawsuit they won. By the time they find a new supplier the extra profit generated would have covered Samsung’s owings

  • http://www.facebook.com/profile.php?id=586005425 Ben Louw

    HAHAHAHA!!!!!!!

  • Blixum

    Very clever move by samsung. Now Apple is financing their own claim for damages against Samsung. LOL.

  • Yuvir

    Smart move Samsung,You’ll be losing the biggest client you ever had!

  • Theunis Jansen van Rensburg

    It was never their decision, Apple has always wanted to find new manufacturers. This all started years ago when Samsung started to become a viable competitor to Apple.

http://www.bandwidthblog.com/wp-content/themes/cnnetwork