Samsung: Our price hike to Apple was scheduled

Payback? Not so, apparently. The 20 percent increase Apple now has to pay Samsung for processors was in the cards, according to a report.

Apple's A6 chip, which is designed by Apple and manufactured by Samsung.
Apple's A6 chip, which is designed by Apple and manufactured by Samsung. Apple

The 20 percent increase that Apple's now paying Samsung for the mobile processors it uses in iOS devices was scheduled at the beginning of this year and not simply payback for any legal losses, according to a new report.

Seoul-based newspaper The Hankyorek (via The Street) reports that the two companies agreed on the new processor prices earlier this year, contradicting an earlier report that suggested Samsung strong-armed Apple into paying more when the iPhone and iPad maker could not find a replacement.

The reported 20 percent increase brings a 1 percent to 2 percent hit on Apple's margins, according to an estimate from analyst firm Piper Jaffray. The processors, which are designed by Apple though currently made by Samsung, make up about 6 percent to 9 percent of the total cost of the devices, the firm said in a research note last night.

Apple has invested in both chip companies and hires from other chipmakers to build up its own operations in recent years. That includes the creation of a new technologies group within the company, announced last month , which puts Apple's wireless and semiconductor teams together. A report last week suggested that Apple's goal is to roll its own chips not just in its portable devices, but also in its computers .

Samsung declined to comment for this story.

About the author

Josh Lowensohn joined CNET in 2006 and now covers Apple. Before that, Josh wrote about everything from new Web start-ups, to remote-controlled robots that watch your house. Prior to joining CNET, Josh covered breaking video game news, as well as reviewing game software. His current console favorite is the Xbox 360.

 

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