Apple Inc. (NASDAQ:AAPL) has removed Samsung Electronics Ltd from its list of vendors set to supply it with the new iPhone 5 memory chips, just days before the big announcement is made, according to reliable sources. The two tech giants have been involved in court battles in the recent past, with Apple getting the odds for the U.S case, whereas Samsung won the South Korean case case.
Apple Inc. (NASDAQ:AAPL) is trying to reduce the amount of business it does with Samsung, as also it seeks to diversify its vendor list for the memory chips.
It has been relying too much on supplies from Samsung, but now, following the recent events, diversification is the way to go, as this could also reduce the risk associated with dependency on a prime the competitor for the supply of the chip.
The Indian Times reports that Korean based Economic Daily cited an anonymous industry source, who claimed that Apple had dropped Samsung from the list of memory chip suppliers for the first batch of its new phones.
In the wake if these announcements, it is believed that Apple Inc. (NASDAQ:AAPL) has identified Japan's Elpida Memory and Toshiba, and Korea's SK Hynix as the main suppliers of its DRAM and NAND chips for the new iPhone.
In another report, in which the Indian times references Reuters, it is believed that the Korean based electronics giant still remains on the initial list of suppliers for the new iPhone chip. However, the person is earmarked to have withheld his identity as claiming that the negotiations were confidential.
Apple sued Samsung over violation of design and software patents, with the latter paying the former $1 billion worth of damages, in which case Samsung vowed to appeal, as it deemed the accusations unfair.
Samsung Electronics Ltd is involved in a wide variety of businesses, and also happens to be one of the few companies that do a lot of business directly with its major competitors. The electronics maker also has a major partnership with Google Inc (NASDAQ:GOOG), as it is the largest producer of Google's Android run phones and devices.
The latest snub by Apple is unlikely to cause any significant disturbance in the overall sales for the company, although the iPhone memory chips line of business will be greatly affected. However, this also deepens the cracks in the relationship between the two rivals, and now its appears as though, it is only a matter of time before one of them begins to feel the heat of the impending consequences. The big question however, is who is it going to be?
While Samsung may have lost the business to the two Japanese companies, as well as to its local competitor, Apple on the other hand, which over the years has always experienced some shortage in supplies for its new devices, could as well be staring at another headache, after ruling out its largest supplier of the iPhone Memory chip.
Yesterday, Apple Inc. (NASDAQ:AAPL) closed at $676.27 per share, up $6.04, or approximately 0.9% increase from the previous close; it will be interesting to see how the markets respond to this news once trading begins at the NASDAQ stock exchange. Samsung, on the other hand, was trading at KRW 1,250,000 ($1,100), up KRW 54,000 ($47.52), or 4.52% increase, as at the time of this writing.