Samsung Display: Apple hasn't kicked our LCDs out of its garden Recent reports quoting a "Samsung Display spokesperson" saying its LCDs will no longer be part of the Apple ecosystem have been contested by the Korean company. According to the Korea Times, Samsung Display currently ranks as Apple’s number-one LCD supplier, delivering more than 15 million devices since the beginning of the …
Apple has repeatedly demonstrated that they will both (a) squeeze their suppliers extremely hard on price and delivery, and (b) happily continue to buy from suppliers they are suing, provided that the meet the required price and delivery targets. This is clearly a case of Samsung preemptively telling Apple to fuck off, and may not even be closely connected to the litigation between the companies.
In fact, IMHO, those who wish to use the argument that it's too much of a coincidence not to be connected with the litigation issue have to explain why it is not to much of a coincidence to be connected to the very clear signs the last year or more (if one has noticed Sharp's troubles and other indications in "the channels" and not been asleep) that all is not well in the displays market and there is a significant possibility that it is close to tanking. Those with retentive memories will recall what happened in the RAM chip market a few years back for example. I am not saying that the current shenanigans between Apple and Samsung have nothing to do with this but the current and likely short to medium term state of that particular market being very unhealthy from the producer's pov combined with Cupertino's famous propensity to squeeze any perceived weakness are more than enough to explain Samsung's decision. Though one should of course not rule out the possibility that it added a certain frisson to say "fuck you round-eyes" as well! :)
Given the latest high PPI screen from Sharp I think even Samsung will be buying Sharp screens for their phones, unless of course they can get find someone to steal the information on how they make them.
http://arstechnica.com/gadgets/2012/10/sharp-now-manufacturing-5-inch-1080p-displays-for-android-smartphones/
When I read this: "The Korea Times says analyst company DisplaySearch has noted a collapse in LCD margins, with the price-per-pixel falling by more than half between the iPad 2 and the current device, from 0.063 cents per pixel to 0.03 cents per pixel." I wondered if somebody had a per inch of screen price. Reason I ask is the pixel density has increased a lot over the past few years and whilst this so called price per pixel value may be true, what is the cost in respect of materials needed. I was always under the impression of reality that when you make technology that over time the productiuon process becomes cheaper as you have recouped your investment. So is this a case of crying about being unable to sell last years technology for this years prices? Hard to say.
But as I don't own Apple or Samsung then they can both carry on bitchfighting and I'll sit here with my popcorn and free seat.
So is this a case of crying about being unable to sell last years technology for this years prices?
Well, it's still all speculation but that is probably the driving force. The higher res screens were suddenly the thing to have once Apple launched the "retina" devices and so whoever could make them could charge a premium. Since then other companies have developed similar techniques and the world has moved on. It's been hard to make money from LCD tellies for a while which is leading to consolidation in that market and it's only to be expected for similar pressures to appear in the market for smaller screens in the absence of additional differentiation (higher intensity, greater efficiency, better colours, lighter, thinner, etc.).
Any company that has invested heavily in capacity will still want to produce and sell as much as possible no matter how low the margins. Suppliers will no doubt be looking both to the putative Windows pad market as well as upscaling the high res screens into 4 and 8k tellies. All the while Samsung will continue to develop AMOLED where the market is still growing, there are fewer competitors and the technology is still maturing.
Just a small point:
"The higher res screens were suddenly the thing to have once Apple launched the "retina" devices and so whoever could make them could charge a premium."
Note that screen resolutions on phones and other devices have been increasing for years. "Retina" is just Apple marketing term. Phones already had been increasing resolutions for years before the iphone 4. And they continue to do so afterwards (plenty of phones beating both the 4S and 5 in resolution).
The only class of devices annoyingly stuck for some unknown reason has been netbooks and their eternal 1024x600.
Meanwhile, whilst other devices like tablets and laptops have increased their resolutions, many of them *aren't* following Apple's stupidly-high resolution, so they aren't necessarily "the thing to have" either (and with good reason - anything higher than HD seems useless unless you have a massive screen, and has problems like rescaling with HD content, as well as the problem of not having the GPU power to drive that number of pixels).
About them leaving/thinking of leaving the TV business because the margins make it not-worthwhile?
Note to any large corporate: you have to make sure your suppliers earn enough to stay in business if you want to stay in business. Being "more efficient" and "being cheaper" is not the same.
The good old 'Principal of Enlightened Self Interest'...you make more money over the long run if you don't squeeze until it hurts.
If you treat your customers and suppliers as part of your business and make it a good deal for everyone then everyone feels comfortable with the end result.
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