Samsung and Apple have been locked in a battle for the hearts and minds of smartphone consumers for years now. That battle has heated up even more after Samsung’s highly successful Galaxy S3 smartphone helped the Korean manufacturer end Apple’s grip on the smartphone market.
The Korean giant may have won the battle but Apple can hurt its revenues in other ways which it is already using.
Samsung in addition to making smartphones, tablets, computers and other consumer electronics also has a multi-billion dollar semiconductor business through which it makes chips, memory modules, and other device guts for third party customers.
One of those customers is “drum roll” Apple.
Most of Apple’s previous devices had their chips and processors made by Samsung with 81% of all processors made by the Korean electronics giant being used in Apple’s iPod, iPad and iPhone devices. This is big business for Samsung but it is already starting to lose on the revenue brought in from building chips for Apple thanks to the two firms’ fierce battle in the smartphone arena.
According to Business Insider Apple is preparing to move the development of its A6 X microchips used in the latest iPad to Taiwan Semiconductor Manufacturing Co (TSMC) from Samsung. The rest of Apple’s line of products will also get their electronic chips from TSMC.
Analysts expect that Apple will completely remove all its chips business from Samsung by 2014 leading to more than a billion in lost revenue for the Korean company.
Samsung will now have to maintain the momentum it has created with its own devices in order to make up for the loss of Apple’s business.
Source: Business Insider
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