South Korean newspaper, Chosun Ilbo recently reported that Samsung had raised the prices of the processors that they make for Apple’s iPhone and iPad devices by 20 percent. The newspaper said that a person who has intimate knowledge of the deal between Samsung and Apple shared that, “Samsung Electronics recently asked Apple for a significant price raise in (the mobile processor known as) application processor. Apple first disapproved it, but finding no replacement supplier, it accepted the (increase).”
Samsung came out in reply to these accusations and made an official announcement in which the world’s leading electronics manufacturer refuted the price raise claims. According to the statement released by Samsung, the company has not increased the prices for iPhone and iPad processors by 20 percent. The unnamed representative of this South Korean electronics company told The Hankyoreh, a local newspaper that prices are “set at the beginning of the year and aren’t changed easily.”
This means that even if a change in prices of processors takes place between the two companies, it will come into effect in 2013, but for the time being no such negotiations are on track between Samsung and Apple. Moreover, prices of the units prepared by Samsung for Apple stay level because both the companies have signed an agreement according to which prices cannot change till 2014 unless a “special cost factor” comes into play, as claimed by a South Korean newspaper, Chosun.
On the other hand, if the claims of iPhone and iPad processors price hikes were true, then it was expected that this increase may have slashed Apple’s gross margin by 1 to 2 percent, a significant sum considering the number of smartphones and tablets Apple sells quarterly.
Source: Inside Mobile Apps, ZD Net, The Verge
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