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Apple invests $100 million in Samsung

Apple invests to help Samsung boost production of flat-panel computer displays, a key component in Apple's new iBook portable.

Apple announced today that it is investing $100 million in Samsung to help boost production of flat-panel computer displays.

Apple Computer said that the $100 million investment in Samsung Semiconductor, a subsidiary of the Korean-based Samsung Electronics, is aimed at ensuring Apple has an adequate supply of displays for products such as the forthcoming iBook portable.

The investment will "ensure that Apple is on the cutting edge of flat panel display technology," Steve Jobs, Apple's interim chief executive, said in a statement. Although not yet on the market, Apple's iBook is generating significant attention. The company said that sales of the colorful new portable computer will help them maintain momentum generated with the success of the iMac. However, to ensure success, the company has to make sure there are enough displays for all the notebooks they want to sell.

In a recent report, Salomon Smith Barney financial analyst Richard Gardner reported that Apple is hoping to ship 500,000 iBooks during Apple's fiscal calendar year 2000, which begins in October 1999. The iBook is slated to start shipping in September.

Analysts had been expecting Apple to price the portable lower than it did, but executives said that increases in flat-panel display prices were the culprit.

LCDs make up as much as one-third the cost of notebook computers and are a critical factor in determining whether prices for these computers rise or fall. Given the iBook's $1,599 price, a sufficient supply of screens is essential to keeping the price down at affordable levels for its target consumer and education markets.

Standford Resources, a market researcher focused on the display market, said in a recent report that the current shortage of displays for notebooks will begin to ease early next year.

The last time Apple paid up for a part of a company was in September of 1997 when it bought Mac clone maker Power Computing in a stock deal worth $100 million.

Prior to that, Apple's most recent acquisition was of NeXT Software for $400 million in cash and stock. Information about Apple's most recent strategic investments were not available at press time.