Samsung has dealt Apple a nasty blow by increasing the price of its mobile processors — the ones built into every iPhone, iPad, and iPod touch — by 20%. According to a person familiar with negotiations between the two companies, Apple initially disapproved the price hike, but was forced to accept it with no replacement supplier available.
“Samsung Electronics recently asked Apple for a significant price raise in (the mobile processor known as) application processor,” the person was quoted as saying in the report. “Apple first disapproved it, but finding no replacement supplier, it accepted the (increase.)”
Apple buys all of its mobile processors from Samsung, and it’s estimated that it will purchase more than 200 million units this year, following the 130 million it purchased last year.
Since Apple and Samsung have been embroiled in a handful of lawsuits against each other all over the world — the biggest of which saw Samsung fined $1.05 billion — it has been reported that Apple is working to move away from the Korean electronics giant and source its components from other companies.
However, it seems Samsung has Apple backed into a corner when it comes to mobile processors. Knowing there’s no other supplier, it can hike its prices and Apple has no choice but to accept them. At least for now. Maybe this is Samsung’s way of getting its $1.05 billion back.
- Source The Wall Street Journal