clock menu more-arrow no yes

Filed under:

In wake of Apple ruling, Samsung's internal 'firewall' between divisions protects key partnership

New, 74 comments

Even as Apple and Samsung wage legal battles around the world, the industry giants maintain an all-important business relationship.

Samsung logo
Samsung logo

Apple and Samsung have something of a complicated relationship: even as the two industry giants wage legal battles around the world, they've remained close business partners. Samsung is the single largest parts supplier to Apple — providing the chips that power both the iPhone and iPad, among other components — and it looks as though the South Korean company is determined to protect that lucrative revenue stream.

Reports of a stringent "internal firewall" between Samsung's mobile and component divisions have come into focus lately in the aftermath of the landmark Apple vs. Samsung ruling. Said to be honored by top executives at the South Korean company, the purported policy is meant to sidestep any potential conflicts of interest between Samsung and component partners. For instance, at a recent emergency meeting called after Samsung's courtroom thrashing, CEO Kwon Oh-hyun — whose chief responsibilities include overseeing the parts business — was not present. Instead, a vice chairman led the proceedings. An internal memo we've detailed previously goes so far as to refer to Apple as one of Samsung's "most important" customers; it claims this prompted the company to attempt negotiations in hopes of avoiding litigation.

For its part, Apple continues to invest heavily in Samsung components. The flash storage found in Cupertino's latest MacBook Air and MacBook Pro models is sourced from the company, for example. And while Apple has expanded the list of partners from which it procures RAM and other hardware, it's hard to envision an Apple product line without Samsung internals — at least in the short term. It appears Samsung has no intentions of letting that change. According to Reuters, one executive made that perfectly clear during the recent meeting, saying "(The) supply contract remains a separate issue from the litigation and there'll be no change to it going forward."