Wednesday, July 13, 2011

Apple-Samsung battle may spur supplier rejig

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An intensifying war between Samsung and Apple is triggering expectations that some of the pairs' $5 billion-plus relationship may be up for grabs.
With the electronics titans squaring off in an acrimonious battle over smartphones and tablets patents, any worsening in their supply relationship could mean more business for Toshiba, Micron, Hynix Semiconductor, Intel and TSMC.
Apple's move to protect its smartphone and tablet business comes as Samsung is set to become the world's top smartphone vendor, ending Nokia's decade-plus reign. Samsung makes parts central to Apple's mobile devices, but Apple in April accused the South Korean company of “slavishly“ copying the iPad and iPhone in its own Galaxy devices.
While it would be a challenge for Apple to sever or water down its long-standing relationship with the Korean company, Apple CEO Steve Jobs is known for abruptly spurning erstwhile partners.
Its relationship with Google cooled rapidly after the Internet giant got into smartphones, for instance.
Longer-term, finding alternative sources for components and reducing its reliance on Samsung for everything from flash memory to processors and displays would make sense for Apple as the two compete head-to-head in an exploding market for mobile devices, analysts say. “They have become more competitors and less partners and so Apple will definitely not be looking to Samsung as its go to partner-of-choice for NAND flash,“ said Brian Marshall, an analyst with Gleacher & Co. He expects Apple to source its future mobile processors from firms other than Samsung.
Supplying major parts for Apple's iPads and iPhones, the industry's gold standards, would be a coup for any company. Making the silicon brains for those gadgets would mean a boost in revenue for TSMC, the world's largest contract chip maker.
And it would be a major victory for PC chipmaker Intel, which is scrambling to find traction in the fast-moving mobile market and has repeatedly expressed a desire for Apple business. “There is a lot of competition, especially for high-profile wins like Apple,“ said Real World Technologies analyst David Kanter. “When you toss Intel into the mix, then it becomes even more interesting.“

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