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?