Rumor says legal disputes with Samsung causing Apple to look for other suppliers

Aug 17, 2011

The legal spats between Apple and Samsung are spread all over the world at this point.

In the U.S., Apple is suing Samsung over its Galaxy Tab 10.1, which Apple claims “slavishly” copies its iPad 2. The outcome of the dispute in the U.S. could result in an injunction that would prevent the Galaxy Tab from being sold here, a huge setback for Samsung in its fight to compete with other Android tablets and hack away at the iPad’s dominance.

An injunction is a very real threat. One has already been enacted in Germany, where Samsung can’t sell its Galaxy Tab 10.1 at all. Formerly, that injunction was spread all over Europe, banning Samsung’s tab from being sold anywhere in the European Union, but developments in the legal battle have called into question whether the German district court has the authority to ban the sales of the Korean company’s product in all EU countries. While that jurisdictional issue is being dealt with (there’s a hearing on Aug. 25), the indictment isn’t being enforced in the rest of Europe, at least for now.

And then there’s Australia, where Samsung is giving Apple the option to inspect a new version of the Galaxy Tab 10.1, which Samsung plans to start selling in the country in the future. The deal between the two companies in Australia is basically to avoid more legal troubles: Samsung has a new version of the tab and it wants to prove to Apple before it even sells it that there’s no copying going on.

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Repercussions of the dispute

With all those issues, one might expect the relationship between Apple and Samsung to have soured some. That’s unfortunate for both companies, because Samsung is a tech company that manufactures parts for iOS devices. Apple now has to find someone else to build those components, and Samsung loses what is undoubtedly a very lucrative business agreement.

According to a story from Reuters citing unnamed sources, Apple is considering a $1 billion investment in Japanese company Sharp to manufacture LCD screens for its devices. That would take care of the displays for iPads and iPhones, but those aren’t the only things Apple will need if it can’t make nice with Samsung.

Reuters is reporting that a number of other Japanese tech companies are hoping that the relationship Apple and Samsung are kaput so that they can cozy up to the American tablet maker and take over the roles that Samsung previously occupied.

Also among the companies listed by Reuters are Toshiba Corporation and Elpida Memory Inc., a chipmaker. Samsung was responsible for building Apple’s A5 processor chip for its newer devices – specifically the iPad 2 and probably the next iPhone – and Apple will need a company to take the reins on that.

It’s not clear how this shakeup might affect the launch of the iPhone 5, if it will at all. We heard just this morning that Apple was feeling pretty secure about the manufacture of the next iPhone and was planning to release it on Oct. 7. We’ve also heard that Apple has increased its orders for the device for the second half of the year. Both of these suggest Apple’s secure at least through the end of 2011.

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We’ll have to see if Apple cuts ties with Samsung after that, or if a few companies are going to be lucky enough to land a new client.

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Phil Hornshaw

Phil Hornshaw is a freelance writer, editor and author living in Los Angeles, dividing his time between playing video games, playing video games on his cell phone, and writing about playing video games. He’s also the co-author of So You Created a Wormhole: The Time Traveler’s Guide to Time Travel, which attempts to mix time travel pop culture with some semblance of science, as well as tips on the appropriate means of riding dinosaurs. Check out his profile.

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