Who is Apple’s #1 nemesis? Google? Microsoft? Dell? HP? Undoubtedly the most complicated relationship in the technology world is between Apple and Samsung. Strange bedfellows, indeed. In many ways, both are partners. And mortal enemies in the marketplace. How does that work?
The Enemy Of My Enemy Is My Friend
Apple makes and sells products to end users. So does Samsung. Smartphones, tablets, washer and dryers, etc. The Korean conglomerate also makes and sells components– products– to Apple, and other competitors.
In essence, Samsung makes ammunition for all those warring with each other in the marketplace. That’s not a bad gig, but made worse when Samsung also sells it’s own guns.
Samsung wages war against Apple with the Galaxy line of smartphones and tablets, while selling to Apple the components it needs to compete with Samsung in the very same industry. Both companies have taken each other to court numerous times. Apple seems to have won the majority of cases against Samsung, but I haven’t heard of money changing hands, so maybe Samsung is the victor.
Word on the streets is that Samsung is the most favored nation to manufacture Apple’s new line of CPUs as well as future displays and memory chips. What are the major components of iPhone and iPad? CPU, display, memory. Part of the problem here is how Samsung has fared in the marketplace in the past couple of years.
Profits are down for smartphones and tablets. Way down. Meanwhile, Apple continues to own about 90-percent of the entire industry’s profits, which makes the Cupertino company a big target for Samsung’s component business. Samsung has ramped up capacity of its component business to attract Apple, which is the world’s second largest buyer of mobile device components (after Samsung).
What worries me as an Apple customer and bona fide certified watcher is how dependent Apple has become on outside suppliers. Apple does the design and engineering, then outsources components and manufacturing. Samsung is a different creature, and today’s line of Galaxy smartphones and tablets are comprised mostly of Samsung manufactured components.
Why is Apple in bed so deeply with a company that seems intent upon– and failing– unseating Apple as the darling of the mobile tech industry? What does Apple gain by giving so much money to Samsung– money that goes back into making the very products that compete against Apple’s products in the marketplace.
If other technology companies cannot compete well against Samsung’s manufacturing capabilities, and Apple designs and uses only the best components which often are made by Samsung, what does that say about the future? One of two things. A Samsung-Apple juggernaut that owns most of the mobile industry. Or, Samsung becomes the component supplier that Apple cannot leave.
Strange bedfellows, indeed.