Apple and Samsung have an interesting relationship. They compete against each other in the smartphone space, but when it comes to components, Apple simply can’t make anything without buying screens, processors, and memory chips from Samsung. Now Apple knows this, so they’ve been doing their best to wean themselves off the Samsung tit. According to DigiTimes, Apple recently placed a ridiculously large order with Elpida for RAM chips. How big of an order? Apple effectively bought half the supply that Elpida’s factory in Japan can produce. We know what you’re thinking, who the hell cares what DigiTimes has to say? Well, the market cares. Samsung’s shares are down 6%, meaning they lost about $10 billion worth of market value, all because of a single rumor. If that doesn’t prove that DigiTimes is powerful, then we don’t know what does.
The bigger question is how much is Apple willing to disrupt their supply chain in order to hurt Samsung? Earlier today we filed a report that said 40% of all the Android devices that were using a developer’s application were made by Samsung. By hurting Samsung, Apple is also hurting Android. But then what happens if the rest of the industry simply replaces Apple’s now cancelled orders with Samsung? That’s also a possibility, which makes this whole situation that much more confusing.
Make no mistake, the only thing that’s limiting Apple’s growth is their ability to make their factories crank out more stuff. They’re selling everything they’re making, so they’re always looking for ways to increase their output. The same can’t be said for most companies.
Worst case scenario, your next gadget will cost slightly more because component prices are up due to decreased manufacturing, better known as a shortage. Best case scenario, your next smartphone or tablet will be incredibly cheap because component makers made too many components. We can’t predict what’s going to happen.
[Hat Tip to @asymco]