Yesterday, the Korea Times reported that Samsung was to cease suppling screens to Apple next year, due to falling profits and presumably, the continuing animosity between the two companies. Today, Samsung has spoken to CNET to refute the rumor, calling it “100-percent false.”
Sources at Samsung were quoted in the original article as saying “we are unable to supply our 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.” Another source said Samsung sent 3 million displays to Apple over the summer, but that number would halve between October and the end of the year.
Apple is known for driving a hard bargain with its component suppliers, and Samsung is said to feel that the company is “no longer a cash-generator” due to the deeply discounted prices and increased competition.
In response to the claims made by the Korea Times, a Samsung spokesperson made a statement to CNET, calling the post “100-percent false,” and that it was asking the publication to alter the story. Of course, this doesn’t mean it’s not true, just that Samsung would prefer it not to be public knowledge just yet.
Samsung has supplied a wide-range of components to Apple for several years, including the processor, RAM, memory and of course, the screen. However, in the iPhone 5, the flash memory, RAM and the battery are all produced by other companies, indicating Apple also wants to distance itself from its longtime partner. It has also started to rely more on LG and Sharp to produce its touchscreens too.
Even if profits are as tight as Samsung makes out, it’s still going to miss Apple should it eventually decide to stop making components for them. Its hands may be full with its own range of smartphones and tablets, along with a burgeoning relationship with Amazon, but any contract loss always hurts.
Samsung’s denial comes soon after it was revealed Apple intended to cut back on its services for processors too. Even outside the courtroom, the war between Samsung and Apple continues to escalate.