Samsung is to stop providing liquid
crystal display (LCD) screens for Apple, in a further sign of the
deteriorating relationship between the two technology giants, the
Korea Times reported Monday.
The companies are locked in a bitter global patent war over their rival smartphone and tablet devices. But, until recently, Samsung remained Apple's largest supplier of screens and computer chips, despite their rivalry.
Samsung now plans to cut back ties with Apple and will stop supplying Apple with LCD screens next year, the report said.
The report quoted Samsung officials as saying that Apple has repeatedly driven down the price it was willing to pay for the panels and that new orders from Amazon and Samsung's smartphone division would make up for losing the Apple contract. Pricing on the latest iPad display meant that Samsung was earning just half as much per pixel as it previously made, according to the report.
"We are unable to supply our flat screens to Apple with huge price discounts. Samsung has already cut our portion of shipments to Apple and, next year, we will stop shipping displays," said a senior Samsung source, asking not to be named.
Samsung Display was the top supplier to Apple as of the end of June, shipping over 15 million LCDs, followed by its biggest rival, LG Display, with 12.5 million, and Japan's Sharp, with 2.8 million, according to market research firm DisplaySearch. But, in the third quarter, Samsung only shipped 3 million units to Apple and was on track to halve that amount in the current quarter, the report said.
Samsung has not contracted to supply screens for Apple's new iPad mini, and Apple is also reducing Samsung's role in chip production, taking the chip design process in house and leaving Samsung solely with manufacturing duties.
According to the Korea Economic Daily, Samsung sold Apple about 7.8 billion dollars worth of components in 2011, making Apple Samsung's biggest customer.
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