There has been fiercely disputing in the view of smart phone patent between Samsung and Apple, but the dispute will not influence the cooperation of other fields, Samsung is still the only foundry of Apple's processor, foreign media reported.
Samsung explicitly classifies businesses.
Samsung executives held an emergency meeting to discuss the impact of the failure of patent litigation. The executives in charge of the issue are Samsung vice-president Cui Zhicheng and mobile phone business executives Shen Zongjun, but not Samsung electronics CEO Quan Wuxuan who mainly administrates components business, which shows Samsung has built a "firewall" between mobile phone and components businesses to avoid mutual influence.
Samsung planed to appeal Friday's judgment, but not on the hope of affecting the components supply contract with Apple. Though jury has verdict Samsung compensate Apple $1.05 billion, the supply contract between Samsung and Apple worth much more than the compensation digit.
In addition foundry application chips for Apple, Samsung also provides DRAM and NAND memory chips as well as display panel. Samsung accounted for 26% of iPhone components cost, said Samsung General Counsel Charles Verhoeven. And Samsung components selling of next year would reach $13 billion and achieve $2.2 billion operating profit, accounting for nearly 8% of Samsung's turnover, Morgan Stanley expected.
Industry experts and analysts posted the business partnership between Samsung and Apple is very important resulting in both sides will not break it. "Apple's iPhone and iPad production needs Samdung due to its only supplier of Apple's application chips. If without Samsung, Apple will lose capacity to produce products. Maybe Samsung has considered to pressure on Apple with components business, which is noted by Apple also," KDB Daewoo Securities analyst James Song claimed.
Avoiding litigation
From this side, Samsung had wanted to reach a settlement with Apple for the patent dispute. Earlier in 2010 when launching the first Galaxy, Samsung has faced lawsuit from Apple. "We initially hoped to negotiate with Apple, rather than rely on law, for they are one of our important customers. However, Apple chose through law, we have no choice but choose litigation.
Samsung was verdict copying iPhone and iPad, though, Samsung's lawyer pointed out Samsung possessed innovated components and wireless technology patents, which is the foundation to achieve production for Apple products.
"However, Apple is not stupid. The contract with Samsung causes no choice for Samsung but supplying products based on Apple's requirements. Besides, if Samsung make its supply unreliable, then other customers will also have no faith in it. And due to Apple's threat to sue Samsung starting two years earlier, therefore there is long time for Apple seeking for customers replacing Samsung," noted intellectual property consultant Florian Mueller.
The outside world also worries that Samsung is possible to lose some components supply contracts due to the litigation. Samsung's shares plunged over 7% on Monday, and market capitalization decreased $12 billion.
"Supply contract is another question different from litigation, which will not change in the future," one executive on the conference of Sunday said. Quan Wuxuan was appointed as the CEO of Samsung, and another two executives was nominated to be in charge of communication and consumption electronics department to avoid possible profit conflict. Currently, Samsung provides electronic components to its competitors Apple, Nokia, HTC and Sony.
With demand for mobile devices rising, Samsung last week declared to invest $4 billion improving productivity of the US chip factory which produces chips for iPhone and iPad. Two months earlier, Samsung announced investing $2 billion to build chip plants and transforming current chip production line to produce logic chips for mobile devices.
Apple reduces relying on Samsung.
Apple is planning to expand suppliers, decreasing the dependency to Samsung. When introducing new products, Apple often suffers short supply. Earlier this year, Elpida provided more than half mobile DRAM chips to Apple, sources revealed.
Main competitors of Samsung in memory chip market include Toshiba and SK hynix, in display panel is LG Display. About 70% shares in global mobile DRAM market are occupied by Samsung, which only accounted for 40% mobile chips of Apple, other suppliers of Apple are Elpida and SK hynix.
"Samsung also diversifies customers to decrease relying on Apple; Qualcomm is one of new customers. Due to strong bargaining power, so Apple is gradually cutting down the profit rate of suppliers, which is a good strategy in the long run," James Song said.
He added: "in short-term, other manufacturers will also benefit from the deterioration of relations (but not including profit rate) between Apple and Samsung. In fact, I am very doubtful whether they can get enough profit from cooperation with Apple."
This is my translation about Apple and Samsung.
Samsung explicitly classifies businesses.
Samsung executives held an emergency meeting to discuss the impact of the failure of patent litigation. The executives in charge of the issue are Samsung vice-president Cui Zhicheng and mobile phone business executives Shen Zongjun, but not Samsung electronics CEO Quan Wuxuan who mainly administrates components business, which shows Samsung has built a "firewall" between mobile phone and components businesses to avoid mutual influence.
Samsung planed to appeal Friday's judgment, but not on the hope of affecting the components supply contract with Apple. Though jury has verdict Samsung compensate Apple $1.05 billion, the supply contract between Samsung and Apple worth much more than the compensation digit.
In addition foundry application chips for Apple, Samsung also provides DRAM and NAND memory chips as well as display panel. Samsung accounted for 26% of iPhone components cost, said Samsung General Counsel Charles Verhoeven. And Samsung components selling of next year would reach $13 billion and achieve $2.2 billion operating profit, accounting for nearly 8% of Samsung's turnover, Morgan Stanley expected.
Industry experts and analysts posted the business partnership between Samsung and Apple is very important resulting in both sides will not break it. "Apple's iPhone and iPad production needs Samdung due to its only supplier of Apple's application chips. If without Samsung, Apple will lose capacity to produce products. Maybe Samsung has considered to pressure on Apple with components business, which is noted by Apple also," KDB Daewoo Securities analyst James Song claimed.
Avoiding litigation
From this side, Samsung had wanted to reach a settlement with Apple for the patent dispute. Earlier in 2010 when launching the first Galaxy, Samsung has faced lawsuit from Apple. "We initially hoped to negotiate with Apple, rather than rely on law, for they are one of our important customers. However, Apple chose through law, we have no choice but choose litigation.
Samsung was verdict copying iPhone and iPad, though, Samsung's lawyer pointed out Samsung possessed innovated components and wireless technology patents, which is the foundation to achieve production for Apple products.
"However, Apple is not stupid. The contract with Samsung causes no choice for Samsung but supplying products based on Apple's requirements. Besides, if Samsung make its supply unreliable, then other customers will also have no faith in it. And due to Apple's threat to sue Samsung starting two years earlier, therefore there is long time for Apple seeking for customers replacing Samsung," noted intellectual property consultant Florian Mueller.
The outside world also worries that Samsung is possible to lose some components supply contracts due to the litigation. Samsung's shares plunged over 7% on Monday, and market capitalization decreased $12 billion.
"Supply contract is another question different from litigation, which will not change in the future," one executive on the conference of Sunday said. Quan Wuxuan was appointed as the CEO of Samsung, and another two executives was nominated to be in charge of communication and consumption electronics department to avoid possible profit conflict. Currently, Samsung provides electronic components to its competitors Apple, Nokia, HTC and Sony.
With demand for mobile devices rising, Samsung last week declared to invest $4 billion improving productivity of the US chip factory which produces chips for iPhone and iPad. Two months earlier, Samsung announced investing $2 billion to build chip plants and transforming current chip production line to produce logic chips for mobile devices.
Apple reduces relying on Samsung.
Apple is planning to expand suppliers, decreasing the dependency to Samsung. When introducing new products, Apple often suffers short supply. Earlier this year, Elpida provided more than half mobile DRAM chips to Apple, sources revealed.
Main competitors of Samsung in memory chip market include Toshiba and SK hynix, in display panel is LG Display. About 70% shares in global mobile DRAM market are occupied by Samsung, which only accounted for 40% mobile chips of Apple, other suppliers of Apple are Elpida and SK hynix.
"Samsung also diversifies customers to decrease relying on Apple; Qualcomm is one of new customers. Due to strong bargaining power, so Apple is gradually cutting down the profit rate of suppliers, which is a good strategy in the long run," James Song said.
He added: "in short-term, other manufacturers will also benefit from the deterioration of relations (but not including profit rate) between Apple and Samsung. In fact, I am very doubtful whether they can get enough profit from cooperation with Apple."
This is my translation about Apple and Samsung.
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