"All warfare is based on deception"
The Art of War
Senior Apple [AAPL] executives are in discussion with Samsung to secure supplies of Retina Display-like screens for the iPad 3, even while the two firms turn to the courts to settle some of their differences over mobile device design.
[ABOVE: Apple's Tim Cook introduces the Verizon iPhone 4 earlier this year.]
High level talks
"Apple wants to tap into Samsung's AMOLED technology for an upgraded version of the iPad2, considered as many as the iPad3 that is likely to be launched toward the end of this year," a source is alleged to have told The Korea Herald on Wednesday (May 25) on condition of anonymity.
Cook offered Samsung an advance payment to secure these supplies, that report explains.
It isn't the first time AMOLED discussions between Samsung and Apple have taken place. In October 2010 Samsung apparently sold all its 2011 AMOLED production to Apple, allegedly for use in the iPad 2, though this didn't happen.
The $2.2 billion display farm
Driven by the renaissance of mobile devices, display production technology is evolving fast. A year ago, AMOLED displays were only slightly available. It remains difficult to produce them in the size and quantity Apple must require for any members of its iPad range.
OLED-Info confirms this, claiming that Samsung's AMOLED display production capacity will reach 48,000 substrates by the end of the year, reaching a more satisfactory 100,000 substrates within the first half of 2012, for an investment cost of $2.2 billion.
To my mind, incidentally, these production targets clearly evidence that the iPad 3 won't be ready until the first half of 2012, when display production ramps up to the higher figure.
Samsung is attempting to be environmentally-conscious with its new display tech, using Universal Display's green PHOLED materials in all AMOLED screens produced in this new fab.
Apple's move to woo Samsung also piles pressure onto LG Electronics, who also make displays for Cupertino. LG seems set to add a new display assembly line at its Gumi plant in order to help meet iPad demand.
Can't live with 'em, can't live without 'em
These reports need to be considered with some skepticism. Apple and Samsung are old allies, but are currently going through the courts with Apple accusing the South Korean firm of copying its look and feel in its Galaxy range of products.
Apple and Samsung have a relationship that goes way, way back. Apple took a $100 million investment in Samsung to secure its display supply way back in 1999. Four percent of Samsung's $142 billion revenue in 2010 came from sales to Apple.
"We are Samsung's largest customer, and Samsung is a very valued component supplier to us. I expect a strong relationship will continue," Apple COO Tim Cook said during the company's just-gone financial call. In other words, Apple can't make its products without Samsung, and Samsung can't make its money.
Samsung's mobile division "crossed the line," Cook added as he explained Apple's move to launch a patent protection lawsuit against its Korean supplier.
"Rather than innovate and develop its own technology and a unique Samsung style for its smart phone products and computer tablets, Samsung chose to copy Apple's technology, user interface and innovative style in these infringing products," Apple's complaint reads.
Most recently, Samsung was ordered to give Apple's legal team access to unreleased product samples and packaging for two of its tablets and three of its phones.
The iPad 3 fantasty
Despite these differences, Apple seems on target to purchase $7.8 billion value of components, including displays, processors, and flash chips, from Samsung this year. Apple has also previously discussed a $3.9 billion strategic investment -- could this be in Samsung's AMOLED production plant?
iPad 3 rumors never seem to die.
In March, Cult of Mac quoted an Apple staffer who warned that iPad 2 would only be an evolutionary release.
"For the iPad 2 dont get your hopes up too high," the report cited its source saying. "Thats all Im going to say. Theyve had a number of problems along the way, and the third-generation iPad is the one to make a song and a dance about."
Apple has moved to quell such claims, most particularly by declaring 2011 "the year of the iPad 2", when it launched the device in March. There is some speculation Apple intends introducing a smaller 7-inch iPad, (or larger iPod touch) in September, perhaps equipped with one of these new high-res AMOLED screens.
True or false, the effect of all these claims and counter-claims is to create a wonderful smokescreen behind which Apple brings together its future product plans while confusing all its industry competitors. It's all in the Art of War, which says, "all warfare is based on deception."
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