Samsung terminates LCD contract with Apple
Samsung has decided to terminate an ongoing contract with Apple to supply LCD panels for use in its growing range of devices. That means, come next year, there will be no Samsung panels used across the iPad, iPod, iPhone, and Mac range of devices.
The reason seems to be two-fold. On the one hand, Apple has been working hard to secure supplies from other manufacturers and therefore decrease its reliance on Samsung. On the other, Apple is well-known for demanding and pushing lower pricing meaning it just doesn’t make business sense anymore for Samsung to keep supplying Apple with displays.
With the ongoing legal action between Samsung and Apple it’s no surprise that the relationship has cooled. However, Samsung deciding to cease shipments next year may cause a problem for Apple. In the first half of 2012 Samsung was Apple’s top display supplier, shipping over 15 million panels. LG only supplied 12.5 million and Sharp 2.8 million.
Losing 15 million panels in a growing market and when you are introducing new devices like the iPad Mini could lead to a serious shortfall in supplies. The question is whether LG and Sharp can increase supply enough to compensate, or whether Apple has other suppliers ready to step in and help.
