Apple and Samsung Are Friendly Again, and the Competition Should Be Terrified | Hacker News Reader

Apple and Samsung Are Friendly Again, and the Competition Should Be Terrified

bloomberg.com

34 pointsadventured27 comments

some one finally realized that Samsung and Android in general are not really a threat to Apple and its device business. They both got their own markets.

Android is also Apple's antitrust friend, just as Apple was for MS in another era. And a popular free operating system protects Apple from entrants (like Windows Phone) because it's hard to compete with free. Yet, it suits Apple because their focus is premium products and premium profits - they aren't suited to, and don't want to, cover low-end commodity markets. So there'd be a gap there anyway.

As Jobs noted at the D5 conference (the interview with Gates), Apple's business doesn't work without Microsoft type companies. Those guys provide the lower 2/3 of the market, and Apple can be BMW / Porsche.

Wonder if it occurred to someone that Apple could simply buy Samsung...

I don't think you understand how big Samsung is. Any fanciful acquisition notion is more likely to go the other way around and Apple would merely be one of the larger divisions of the conglomerate.

According to Forbes, Google's market capitalization currently stands at around $382 billion, while Samsung is currently worth $186 billion. That would enable Apple to buy, and shut down, two of its biggest rivals in the consumer electronics space.

– http://www.engadget.com/2015/02/11/what-you-could-buy-with-a...

Samsung's yearly revenue is in excess of $300 billion/year and growing. About 2x Apple's.

Samsung Electronics is a division of Samsung and accounts for $186 billion/year.

Put another way, Samsung's Electronics division earns more revenue that all of Apple.

This may not really be true anymore. Apple may earn more revenue than Samsung in 2015. Apple reported 74.6 billion in sales versus Samsung's 48.8 in calendar 2014 Q4. The most recent quarter saw pretty even results with Samsung slightly ahead with 43.6 billion vs Apple's 42.1 billion.

Than Samsung Electronics. Again, an important distinction. We're comparing revenue of all of Apple against a division of Samsung.

Market value is the important metric here

Market value != buying power.

The point is, people get too enamored with Apple and lose all sense of perspective. The notion of Apple buying out Samsung is so absurd that it provides an almost scary demonstration of this effect.

Samsung Electronics is a publicly traded corporation and the market value is what it would cost to acquire them (plus some premium). This is sort of academic because it would be a dumb use of Apple's cash to acquire them and probably wouldn't be approved.

So is Apple, and Samsung has nation state support it can use as leverage in a buyout (Since we're trading stupid buyout scenarios)

Market cap hinges on projected profit margins on projected revenue.

No, Market Cap is defined as total dollar market value of outstanding shares of a company.

Seriously, is this a game where people come out of the wood-work and just start saying words that describe metrics measured in dollars and then misapplying them?

I said it hinges on it. There are other factors like defensive purchases (WhatsApp), interest rates, etc. that can also affect market cap. I wasn't talking about the definition of market cap.

(revenue != profit)

And?

Revenue is still a component in purchase price. Apple doesn't have enough cash on hand to buy Samsung either way.

You folks can keep throwing out things-measured-in-dollars like they mean things. But none of them are components that mean cash>asking price.

wow, that article is amazingly pointless. I don't have much in the way of expectations for Engadget but I can't even imagine what they were going for there.

After Apple, SanDisk’s biggest customer is Samsung, according to data compiled by Bloomberg.

Really this is just a 'short SanDisk' article :-) But more seriously, it is interesting when supply chains get squeezed down to a single supplier, it is an unstable configuration historically as the supplier inevitably feels they aren't getting enough of the value[1] which then disrupts overall supply.

I am also really surprised that Intel hasn't more aggressively stepped in here, seems like there is some margin for the bottom line they can pick up.

[1] In all economics you're at a good balance if the seller thinks you paid to little and you think you paid too much.

The only way Intel will get Apples business is to make ARM chips for it.

If you read the iPad chapter in Steve Jobs by Walter Isaacson, you would see that Intel was Jobs original pick for the iPad CPU. They fell out over a few issues, power consumption and control of the chip design being but two of them.

I thought Samsung was already providing Apple with hardware for the iPhone?

I think the story is that they were, and then they weren’t, and now they will again.

It's a weird love/hate relationship. The previous fallout seemed pretty bad, sued for Billions of dollar; yet business brought them back together. Mutual interest is a strong force.

They never stopped providing components to Apple.

Every few months for several years Apple-centric blogs announced (wit glee) that Apple had abandoned Samsung for the upcoming generation of it's mobile CPU (Samsung makes lots of other components for Apple, but the A-series chips were always the focus of these stories) but I think the most that happened was Samsung and other fabs splitting production on certain items, which is probably a good planning anyway when dealing with that size of project.

They are, but public perception is that there was a large falling out and some of the acquisitions moved to other vendors. But Samsung has still supplied the bulk of the hardware throughout. This is a piece to publicize that the nastiness is over and everybody can be overt about the relationship again.

Now Samsung and GlobalFoundaries would be proving hardware to apple

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