Samsung has long been a Dr. Jekyll and Mr. Hyde vendor competitor which targets Apple, not just for copying the company’s designs, but for the company’s business. In fact, Apple’s smartphone and tablet is so huge that a number of companies stand in line to sell components.
Of Chips, Screens, Batteries
The A8 CPUs in iPhone and iPad are custom designed by Apple in house, but manufactured by outside sources, including Samsung. That’s right Samsung makes the very bullets that have destroyed their own company’s profitability.
Why is Apple a target? The company makes more premium devices than any other company in the mobile device industry. Apple needs CPUs, high resolution screens, cameras, and batteries– in quantities that competitors can only dream about, but component manufacturers dream will make them rich.
Where does Apple get all those components? In the case of some CPUs and screens, from competitor Samsung. Apple scours the globe for suppliers that can build the company’s designs, so Apple is a target for component manufacturers.
One case in point is Taiwan Semiconductor Manufacturing Company, TSMC, which specializes in advanced CPU production, and is a major competitor to Samsung. Apple dangles potential orders in front of both companies to secure lower prices and higher quality because doing business with Apple could mean many billions of dollars a year in revenue for the manufacturers.
For example, Samsung and TSMC both plan to produce A9 CPUS for new iPhones and iPads, both using 14nm and 16nm process technology to reduce the size and improve speed of Apple’s custom designed CPUs. TSMC specializes in thinner manufacturing and has plans to produce 10nm and 7nm chips– probably for Apple’s A10 CPUs next year– even more powerful and efficient than what has yet to be shipped.
Battery, camera, and screen manufacturers also target Apple because the company buys tens of millions of specific components each year. Multiple manufacturers supply iPhone and iPad batters, Sony is touted as the maker of cameras used in iPhone and iPad, and even Samsung supplies many of Apple’s best Retina displays.
Interestingly, Samsung saves it’s best screens for the Galaxy S6 and Edge smartphones, and newer tablets, both with higher resolution screens than what Apple uses in iPhone and iPad, however, at Retina display levels most customers cannot tell the difference, and Samsung’s devices have notoriously poor battery life. It’s likely that Apple will sell over 200-million iPhone 6 models, each with a high resolution screen, large battery, powerful CPU, high resolution camera, and the proprietary Tough ID fingerprint reader– none of which are made by Apple, but designed by the company’s engineers, with manufacturing farmed out to many hundreds of suppliers– each one which wants to do more business with Apple next year.
Apple is a big target for competitors that wish to take some of the company’s profits, now estimated at about 85-percent of the smartphone and tablet industry, but an even larger number of component manufacturers target Apple to become a preferred vendor, a maker of the parts Apple designs, specifies, and includes in the company’s line of premium products.