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Samsung Ups Apple Chip Prices by 20% as Apple Gets Stomped By Karma...

by on13 November 2012 2618 times
14621rotten apple

There appears to be something in the air this month or perhaps it as always been there and people are just waking up to the smell. It is the smell of a company getting stomped by Karma over in the corner. The company in question is Apple. For a few years now Apple has been on a campaign against their rival in the mobile OS space; Android. We were not surprised to see them go this route as they did the same thing with Microsoft a long time ago and got their hats handed to them by Microsoft (a one-time partner). Oddly enough when Apple was financially on the brink of ruin it was Microsoft that bailed them out, but I am getting off the subject here. When Apple’s Steve Jobs declared war on Android we had more than a few flashbacks to the days of law suits flying back and forth between Microsoft and Apple. However, Apple did not go after Google head to head; perhaps they thought they had learned something from the past, then again maybe they did not. After all they went after almost every Android phone maker even ones that they buy parts for their own products from!

One of the things that have always bothered us about Apple is the way they treat their partners and customers. It is as if they think that everyone is lining up to work with them. Now while many do see dollar signs when it comes to Apple most of them also know that dealing with Apple is like dating a crazy person.  In fact one case maker told us that it was exactly like dating an insanely hot chick that also happened to suffer from insanity. That small interview combined with a few others was quite the eye opener for us.  For whatever reason, Apple continues to abuse their partners even to the point of directly suing and slandering them (Samsung). The word has gotten out and some potential partners are now very leery of working with Apple. They know that no matter what the promises that Apple has put on the table they all can go away in the blink of an eye.

This means that Apple has had to turn to companies that need the help. They have switched almost entirely to Elpida memory (they are being bought by Micron) and have invested heavily in Sharp, LG and a couple of other panel makers that are not having the same success as Samsung.  Their big problem is that they do not have a foundry partner quite yet so they are stuck with Samsung making their SOCs for a while. Apple would like to move to TSMC, but TSMC is not going to rush out and bow to Apple’s will. They (TSMC) have even rejected a rather large amount of money from Apple for dedicated production capacity. TSMC has stated that they will expand their manufacturing on their own, but that they will not make it dedicated to Apple (at least not yet).

Because of the way that Apple has treated Samsung they have decided to increase the price per-SoC by 20%. This little hike when combined with the volume that Apple purchases from Samsung should help to offset that $1 Billion+ win that Apple managed in the US. On top of that Apple has been ordered to pay all of Samsung’s court costs in the UK. Not just legal fees and court time, but everything: Phone calls, document reproduction, travel, drive time, EVERYTHING. That surely is going to help Samsung’s bottom line. Even better news for Samsung is that their Galaxy S III Phone is the bestselling smartphone for this quarter.

In the end Apple willingly and knowingly boarded this Karma train. They went on a global offensive against Android using patents that in some cases they do not even have products for (mostly their tablet design patents). This offensive has cost Apple money, time and also consumer favor. No one likes a company that does the things that Apple has knowingly done from lying about Samsung copying their products to lying when directly ordered to tell the truth by the courts. There is more though; Apple continually makes the claim that they are the source of innovation for so many companies, but they have been found guilty of patent infringement in Texas and recently signed an agreement with Swiss Rail for the use of their patented clock design (which Apple “borrowed”).  Apple has to make some serious changes and soon or they will not be able to stop the downward trend they are on no matter how many refreshed products they release…

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Last modified on 13 November 2012
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