Samsung Further Compartmentalizing Internal Business Divisions to Keep iPhone/iPad Chip Making Business
Samsung may have lost its case against Apple in the U.S. court, resulting in a fine of more than a billion dollars, but the South Korean company does not want to lose Apple’s business.
After Friday’s loss, several Samsung executives met up to discuss the company’s next move. Samsung CEO Kwon Oh-hyun was not present at that meeting, in an effort to compartmentalize the dispute within the company so that it does not effect other facets of business.
CEO Oh-hyun is primarily responsible for the company’s component business, which needs to maintain a relationship with Apple. Samsung will, inevitably, be appealing the billion dollar decision, but the company is eager to make sure that its ongoing legal battle with Apple won’t effect its Apple supply contract, which is far more valuable.
The two companies, even though they appear to be enemies, are inextricably linked. Apple has been unable to replace Samsung as a supplier, though it has secured some contracts with Samsung competitors like Elpida and Hynix. Despite this effort, Samsung’s components still make up 26 percent of the base component cost of the iPhone.
Samsung is the sole supplier of the chips that power both Apple’s iPad and iPhone, and neither company can afford for business relations to go south. By excluding the company’s CEO from the trial meeting, Samsung has sent Apple a clear message that it is keeping clear lines between its handset business and its component business.