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The next major battlefield for Apple and Samsung

Dan Graziano
May 17th, 2013 at 12:40 PM
Apple Samsung dispute

Samsung and Apple have fought over market share and patents, and they may soon start fighting over supply chains. Samsung traditionally built its products using internal supply lines, but as its devices became increasingly popular the company has been forced to seek outside help. Reuters reports that Samsung has reached out to some of Apple’s key supply chain partners about helping the company manufacture its products. With the two companies fighting for supply lines, Samsung’s presence could increase Apple’s cost and lead to component shortages that might disrupt Apple’s future products.

“The next round of the post-patent battle for them will be over component supplies,” said Lee Sun-tae, an analyst at NH Investment & Securities. “Who wins access to the best performing components in class in large quantity – that’s the key… and explains why Samsung is shopping for components more than ever.”

Samsung has turned to companies like Qualcomm, Sharp, Toshiba and Sony for additional components, all of which supply parts for Apple’s iPhone. Samsung understands that relying on a single company for its components can result in delays due to production shortages or other supply chain problems, and is looking to spread out minimize risk.

“Having a single supplier carries a lot of risk. Bearing that in mind, Samsung may even consider using LCD along with OLED in its signature Galaxy S range to reduce its total reliance on Samsung Display,” said Song Jong-ho, an analyst at KDB Daewoo Securities.

Samsung’s latest flagship smartphone has already become the company’s fastest selling device. The Galaxy S4 has sold 6 million units into channels in two weeks and will likely surpass the 10 million unit milestone next week.

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