Reports coming out of Korea today are suggesting that Samsung Displays have already taken the internal decision to terminate an ongoing contract with Apple in a move which means that the company will no longer supply the Cupertino-based giants with Liquid Crystal Display panels for their mobile devices. Although Apple and Samsung have been long-term corporate partners, the rivalry that has been growing between the two companies has been intensifying of late with the relationship eventually reaching meltdown.
Samsung Displays have benefitted from being one of the major components suppliers to Apple over the last few years, but as Apple makes its move to stiffen up their supply chains and squeeze higher profits out of their processes; it looks like Samsung have been caught in the crossfire. Rather than supplying the panels at the current rate and generating a smaller income front the deal, Samsung looks likely to take the rather large and possibly controversial step of walking away from the deal altogether.
An unknown Samsung employee who is said to hold a senior management position within the company has moved quickly to confirm the speculation, stating that they are "unable to supply flat-screens to Apple with huge price discounts. Samsung has already cut our portion of shipments to Apple and next year we will stop shipping displays". Although Samsung has so far been the largest provider of LCD panels to Apple this year, the iPhone makers have placed a higher reliance on the likes of LG and Sharp for their display technology, meaning Samsung stand a good chance of organically falling down the supply pecking order.
The move to cut supply ties altogether may raise some eyebrows considering that Apple’s orders may be dwindling, but still represents a large portion of the Samsung Display revenue stream. Although that may be true, it would seem that the company have found alternative business in the form of Amazon and Samsung Electronics who now have their LCD panels provided by Samsung Displays. There has understandably been no official word from the company about the legitimacy of the reports, but it is widely expected that 100% of Apple’s LCD panels will be supplied by alternative companies come next year.
(via KoreaTimes)
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