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Saturday 15 September 2012

Apple seeks to reduce dependence on Samsung supplies.

 Apple mackintosh Inc. is seeking to gradually reduce its reliance on South Korea's tech leader Samsung Consumer electronics Co. for parts supply in a very bid to exert a larger control over its supply string, a report said Friday.

The Boston based-investment research firm Trefis said within the report that Apple is moving toward decreasing its contact with Samsung Electronics and fostering larger supply-chain competition.

The iPhone maker has been diversifying its suppliers by means of roping in Samsung Electronics' aspect rivals, such as LG Screen Co. and Hynix Semiconductor Inc., each of South Korea, as very well as Japan's Sharp Corp.

"While the move is it being seen by many as prompted through the ongoing patent litigation between the lenders, we believe that this more an answer to Samsung's growing smartphone revenue, which could lead to a conflict of interest for that company in the coming decades, " the Trefis report mentioned.

"With Samsung's smartphone sales growing with a rapid pace and the organization acting as its own supplier on many occasions, it could pose an exciting dilemma for Samsung if it were forced to choose between Apple and itself in case of a supply shortage at it's factories. "

Samsung and Apple together control over fifty percent of the global smartphone current market. In the second quarter this coming year, Samsung's market share stood from 32. 6 percent, followed by means of Apple with 16. 9 pct, according to market researcher IDC.

The two tech heavyweights have been locked in some legal suits, accusing each other of pattern and technology patent infringements on their key respective mobile devices, including Samsung's Galaxy cellular phones, and Apple's iPhones and iPads.

Apple is increasingly feeling the call to diversify vendors, as it would mitigate raise the risk of Samsung prioritizing the way to obtain its own parts over Apple's, Trefis mentioned.

Samsung Electronics is currently the only supplier of microprocessors used within the iPhone and the iPad, with Samsung components creating a significant 26 percent with the iPhone's total costs, it added.

With demand expected to remain strong while using the launch of the latest iphone 5, it would be required for Apple to find additional vendors, giving the California firm additional choices, the report said.

"Fostering higher competition in the supply chain will deliver Apple greater bargaining power and help it control the price tag on supplies, thereby supporting its profit margins in the longer term, inch the investment research firm mentioned.
"As the smartphone market gets commoditized as time passes, we expect Apple's iPhone margins to help fall, but a greater supply chain control could mitigate raise the risk to an extent. "

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