|By Maureen O'Gara||
|October 23, 2012 07:30 AM EDT||
Samsung told the Korea Times Monday that it will be terminating its contract to supply Apple with LCD displays next year.
It blames it on the margins it can fetch from Apple's business although it appears that it's really Apple that's doing the "terminating" by shifting its orders elsewhere.
Apple is Samsung's largest components customer, but Apple's belief that Samsung stole its iPhone and iPad technology and the worldwide litigation that has resulted has driven a massive wedge between the two companies.
The paper says Samsung Displays "believes its American partner is no longer a cash-generator due to the iPhone maker's stiffer supply-chain management structure."
Apple has been rumored to be moving its business to Samsung rivals and Samsung's move seems to confirm the scuttlebutt. Evidently Apple is getting better pricing in the process.
An unidentified "senior Samsung source" reportedly told the Korea Times, "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."
Amazon and Samsung's own handset unit will reportedly pick up the slack and increase their orders for the displays used in tablets although Apple's much-rumored iPad mini, which is supposed to debut this week, could take market share from both of them.
Samsung Displays was Apple's primary supplier at the end of the first half, shipping over 15 million LCDs, followed by LG Display at 12.5 million and Sharp at 2.8 million, according to DisplaySearch's research.
A "source who is directly involved with the matter" told the paper that Samsung shipped less than three million screens to Apple in Q3 and expects shipments this quarter to drop to around 1.5 million units. Samsung also got no orders for the iPad mini, which is said to have a 7.85 inch screen.
The price per pixel dropped more than a half from the iPad 2 to the new iPad. DisplaySearch said the LCD display used in the new iPad, which has a resolution of 2048 x 1536 millimeters, sports 3.14 million pixels priced at $.00003 per pixel. The one for the iPad 2 was priced at $.000063 per pixel.
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