Apple Inc. Becomes Samsung’s Largest Customer With $7.8 Billion in Trade (AAPL)
We’ve reported before on the unique relationship that Samsung and Apple Inc. (NASDAQ:AAPL) share. On the one hand they are both involved in several critically important markets in the tech sector, where they are in direct, and sometimes fierce, competition. Samsung’s Tablet offerings to date are the closest that anyone has come to a rival to Apple’s iPad. And their phones in many ways are right up there with Apple’s iPhone’s overall quality of construction. Not surprising when a lot of the parts, or at least their origins are the same.
Samsung are also in bed with Apple’s biggest mobile software rival; Google Inc. (NASDAQ:GOOG), who provide the Android mobile operating system for their smart phones and tablets.
At the same time Samsung has entered mobile silicon (SoC) design and manufacturing deals with Apple, as well as providing the worlds largest tech giant with most of its screens and Flash RAM.
Earlier this year we reported that Samsung has tied up almost 50% of its silicon chip manufacturing capacity to be at Apple’s disposal, and the the Korean company is looking to build dedicated factories in the US to further serve Apple Inc.’s tablet computer and smartphone and iPod component requirements in the future.
Today we learn that AAPL is expected to put $7.8 Billion Dollars Samsung’s way this year alone, in component purchasing orders. That’s screens, chips, RAM and a few other bits and bobs for iOS devices.
All the while Samsung is ramping up production to build rival products to Apple’s iPhone and iPad too.
Both companies are growing at an incredible rate and both are impressive in their own way.
Apple seems to have the perfect partnership with Samsung. A partnership that people at Nokia and Microsoft may well be jealously eyeing as they try to work out the kinks in their shock announcement of a partnership over the weekend.
But, even so, Apple must be just a tad worried what would happen if the two companies hit a rocky patch in their relationship. Apple typically likes to spread its orders around multiple companies to keep its supply chain protected from shortfalls from any one supplier. They also tend to play suppliers off against each other for better prices.
This is one of the reasons that Apple has been rumoured to be frustrated with problems with Intel’s Integrated GPUs for Macs in the past, and recently with faulty processors for it’s laptop range holding up supplies from Intel also. Any delay from them effectively affects Apple’s entire computer range.
With orders as large as the one’s Apple has with Samsung, Apple must know that it would be hard to find a replacement for them in the future. One wonders where Apple’s mystery multi-billion dollar investment is in manufacturing that was touched on at the last earnings report. Samsung, or somewhere else?
Marriage made in Heaven; Samsung and Apple? Or a disaster waiting to happen? Let us know your thoughts in the comments…