Apple CEO has a glass of wine with Samsung CEO, laughing while reading fanboys of both companies fight about which company is best. wink
Although it's only prudent that they still keep each-other at arms length, and scrutinize every business decision with the other.
Apple is like the USA to Samsung's China in this specific relationship in that the product (components in this case) pretty much goes one way, but both still rely on the relationship.
Samsung makes some of the components Apple needs, Apple buys those components. Apple needs Samsung for inexpensive chip fab, Samsung needs Apple for the revenue provided in return.
In this particular case though (Samsung/Apple) the overlapping interest is part of Apple's core, and just one of many Samsung divisions. It would not be (or at least it's not obvious that it would be) in Samsung's interest to poison the well of their component division just because it happens that their phone division competes with Apple. Ditching Apple may not, on its own, be an issue after a couple years, but it would put other component customers on edge. See the concern some Android phone manufacturers had when Google bought Motorola's mobile division for a similar issue but from the software side.
Nobody would seriously end this relationship from Samsungs end, at least if they had any brain cells.
And someone is going to take away the handset business - everyone in asia is basically waiting for Huawei and ZTE to eat Samsung's lunch. Samsung can't compete with either of them on cost, and eventually they won't be able to pump more pixels into 400+ppi screens to keep customers from buying cheaper smartphones. And without unique software to offer consumers (like Apple), Samsung is extremely vulnerable in the handset market.
And in the meantime, Samsung is amortizing a fortune's worth of chips fabs that were mostly built to supply components for iDevices.
Yes, Samsung needs Apple's business.
Samsung do have their own Software (Tizen, and Bada(?), and a third 'unknown' base). They are pushing for an Android compatible linux, with strong hardware integration. Huawei and ZTE won't be able to compete with that. They could fail completely on that strategy, but they are doing more than just increasing PPI.
This isn't a competitive edge against Huawei and ZTE because no one buys Samsung phones for their software.
Not sure how you can judge a whole companies software engineers, based on one project (Touchwiz).
No they don't. Android has the largest ecosystem. They're riding on Android's train - they don't have their own train. And they're on the Android train with Huawei. And if they're dumb enough to jump off the train, then they're in the bushes.
Samsung has a huge brand, they could easily make Tizen a competitor by deploying it on Galaxy Phone in the future. Consumers wouldn't know (or care)
No they couldn't. Brand doesn't count for anything if you're selling the same stuff your competitor is. Substitutability. The top phones from Apple, Samsung, and HTC offer more for more money than what Huawei can offer right now because there's room for mobile hardware innovation, and that's what they do best. Once they hit a ceiling - no more pixels to add to the screen, no more transistors on the CPU without exceeding a reasonable thermal envelope - then its all Huawei's game. The only one of those three that stands a chance is Apple because they have their own ecosystem.
Samsung has more brand recognition than Huawei. And it doesn't matter a whit. They'll still get steam-rolled once the ppi wars are over and we're buying based on price. This is the grim reality that Samsung shareholders have been realizing.
Not sure how you can judge a whole companies software engineers, based on one project (Touchwiz).
I've owned many Samsung products and have had no good experiences with their software or drivers. I'm willing to be convinced otherwise, but so far they seem to fit the stereotype of the hardware-company-that-doesn't-get-and-can't do-software.
"need" may not have been the be the best word to use there. I didn't mean to imply that either needs the other by the strictest sense of the word. I meant it more in the sense of "I need my morning coffee". I don't really need it, but I'd, you know, really, really like to have it.
Btw, Samsung is so massive and diversified that it is into areas like Construction, Ship Building, Finance, Automobile, Retail. Its a very different company. It adapts to any domain, very fast. Few years back it became Top player in consumer electronics,last year it surpassed Apple in smart phones sales, had been a top player in Memory and tomorrow if space travel is the money spinner, it will be there.
You know Burj Khalifa, Taipei 101, Petronas are all built by Samsung ofcourse Samsung Engineering & Construction. So we need to mind which part of samsung we are talking about.
I remember that between getting off of the plane and going to bed, I had ridden in at least 2 Samsung built vehicles (a bus and a taxi -- dunno about the subway), shopped in a Samsung owned store, made some phone calls on a Samsung phone, got into a Samsung built apartment building and taken a Samsung elevator up to an apartment filled with Samsung appliances where I went to sleep watching news on a Samsung TV.
Later, on the same trip I experienced a very similar conglomerate built world in the form of LG and Daewoo, even getting a trip to a massive Daewoo ship building facility that cranked out - to spec - everything from oil tankers to submarines.
Then I went to Seoul and saw that same company brand on top of the largest skyscraper in the city - Daewoo.
Absolutely mind blowing.
And the only one of them that's making big money right now is mobile. That's where most of Samsung's (and I mean the big diversified company, including building boats and selling insurance) income has been coming from the last 2 years.
Samsung is very focussed on mobile right now.
Mobile handsets may be the largest slice of the pie, but that's only because it's so easy to pad the margins.
Furthermore there is value to participating in other industries, even if only to break even. The expertise and business relationships are certainly contributing to Samsung's bottom line in ways other than revenue.
If Apple starts getting marketshare, Apple wins and Samsung wins.
If Android starts getting marketshare. Samsung wins and Apple loses.
I bet each production cycle Apple starts threatening it will manufacture its own chips and it starts to feed the rumor mill. Samsung gets nervous and gives them a very good deal.
Even if Samsung's profit margin drops significantly, it's still going to look much much better to the markets than if they lose their Apple contract.
At the end of the day though, if push ever comes to shove, there isn't much they couldn't afford to buy outright, even their own fabs. I was holding out hope that they were trying to save 200B to build out their own wireless infrastructure, but they could conceivably buy control of Intel instead.
This is conventional wisdom and at some level of course it's true but in general I think it's misleading. The fact is that the markets Apple and Samsung are in are not identical. The market Apple competes in roughly equates with the top third of the smartphone market. Samsung competes in the entire phone market. It's quite possible for both to gain market share at the same time in their respective markets. And even if they weren't it's possible for both to lose market share but still be successful because the market for smartphones itself is increasing rapidly.
Samsung is a very impressive company. It doesn't use the Nike-esque marketing playbook Apple does, and as such, it doesn't inspire the hero worship or the fanaticism in the States. But it's been quietly building up a massive empire.
[Full disclosure: I say this as an Apple fanboy, and as the resident iOS 7 apologist at my office (everyone here's firmly on Team Android). I own plenty of Apple and Samsung devices, and I don't feel the need to declare absolute brand loyalty to any one provider.]
Nike's playbook -- as made famous by Phil Knight in the 70s, 80s, and 90s -- was to market a lifestyle, not a shoe. Nike is an incredibly innovative marketing company, and Steve Jobs himself fondly referenced Phil Knight's work at Nike as inspiration for how he thought about marketing at Apple.
"It always amuses me to see how much vitriol comes from anti-apple folks..."
Was I the intended recipient of that description? I'd hardly call myself "anti-Apple," nor would I say I've engaged in "vitriol" directed at Apple. Almost the complete opposite, in fact. :)
Apologies if I'm misreading you.
You did a great job, summed up my thoughts. If I wasn't an Apple kind of guy, I'm sure I'd have an S4.
Apple thrives on publicity and hype, its part of their image and its polarising.
They are the Goldman Sachs of the electronics industry. The Korean government and the Korean people will never let Samsung fail. Having such a sturdy safety net means they can take some very bold risks and those have really paid off for them.
Building a fab and developing semi technologies requires a huge amount of capital, but if a competitor comes up with a better process you lose your lunch. That doesn't mean that in the next generation you won't be out ahead though.
Intel seem to do pretty well without a government to bail them out, but the other players are all deeply intertwined with their governments.
Maybe high tech manufacturing is an industry where it is hard for free market countries to compete, hence its flight from the west. Actually, a lot of technological success on the US is built on the back of its military industrial complex.
Is deep government involvement required for technological development? (Specifically the needs R&D and money, not the many small bets found here). If so, wouldn't it be nice if our engine for funding that wasn't built around war.
Whether government investment or assistance is necessary for deep technological R&D is a really interesting question. A preponderance of our hardware (and many of our software) advances, even in the private sector, were built on the back of major government R&D investment. As you've pointed out, a lot of this has come from the military-industrial complex.
Our major companies (other than Goldman Sachs and its peers) don't receive the same level of protection that the Korean chaebol, or the Japanese Big Four, or the Chinese or even French conglomerates do. But that may change in the near to distant future. It will depend upon our domestic firms' abilities to compete on an international playing field that is increasingly turning toward the chaebol model, and not so much the free-market model.
It's TLC, so a bit slower and it won't last as long, but for almost 30% cheaper it's good value.
"Does Apple make anything which is best-in-class which other companies need?".
The answer is obvious. No.
> "Chipworks also found the new M7 motion coprocessor inside the iPhone 5s, which is labeled as the NXP LPC18A1. It's based on the LPC1800 series Cortx-M3 microcontrollers made by NXP. As for the enhanced camera in the iPhone 5s, the iSight module was discovered to be a custom Exmor-RS sensor from Sony. Other parts in the handset include a touchscreen controller from Broadcom, an LTE modem by Qualcomm, and NAND flash from SK Hynix."
http://appleinsider.com/articles/13/09/20/samsung-confirmed-...
"Does Apple use any components which are best-in-class and unavailable to competitors?"
The answer there is "yes", at least according to a bevy of evidence from the AnandTech review/benchmarks: http://anandtech.com/show/7335/the-iphone-5s-review.
edit: To clarify, I mean this because the A7 is a custom design that just happens to be fabbed by Samsung under contract, rather than an off-the-shelf component, like the M7, that has simply been granted a marketing buzzword. Other OEMs will not simply be able to integrate the A7 in their products for this reason.