Apple securing $7.8 billion worth of Samsung displays, memory?
A report says the two companies are working out a deal to make Apple Samsung's largest components customer. Is this the supplier deal Apple hinted about last month?
When Apple announced, the company's CFO mysteriously dropped a bit of info about a big contract the company signed worth $3.9 billion. He declined to elaborate further except to say that it was for product components that Apple feels will be central to its future products.
It's not unusual for Apple to sign large contracts with suppliers to ensure its own access to certain components as well as make it difficult for its competitors to get similar parts. Apple did it withtwo years ago, and is regularly the largest buyer of flash memory in the world.
Still, CFO Peter Oppenheimer's sly mention got the guessing game going as to what for and with who this contract could be. Today we have a hint. The Korea Economic Daily reports today that Samsung and Apple are working on a contract agreement worth $7.8 billion. Apple would reportedly get a variety of components in return: LCD panels, processors for mobile devices, and flash memory. Samsung and Apple have worked together often, but this would make Apple Samsung's largest customer, according to the report.
Now, $7.8 billion is exactly twice the $3.9 billion Apple mentioned last month. It could be that half of the Samsung order Apple is placing, or $3.9 billion of it, is going toward one specific component, like high-resolution displays. It's widely assumed that those parts from Samsung are for future models of iPhones and iPads. Touch screens and high-resolution displays are key ingredients to both products.