Samsung tightens the A6 pricing screws on Apple by 20 percent

Mon, Nov 12, 2012

News

While Apple has settled its dispute with HTC, its legal battles with Samsung continue to rage on. To that end, we’ve heard a number of rumors regarding Apple’s efforts to look for a Samsung ┬áreplacement, but remember that Apple isn’t the only one holding any cards in this game.

Marketwatch reports that Samsung really upped the price it charges for Apple’s mobile processors by 20%.

“Samsung Electronics recently asked Apple for a significant price raise in (the mobile processor known as) application processor,” the person was quoted as saying in the report. “Apple first disapproved it, but finding no replacement supplier, it accepted the (increase.)”

The two firms have started to reflect the new supply price recently, the report added, citing the same person.

Volume wise, the report notes that Apple received about 130 million units from Samsung last year and expects to receive approximately 200 million units this year. So as much as Samsung needs Apple for that cash money, Apple is equally reliant upon Samsung to make their iOS products live and breathe.

And so how much of a cash increase are we talking here per unit? Well according to HIS iSuppli, the A6 processor in the iPhone 5 runs at about $17.50. A 20% bump on that would rise the price to an even $21. By way of contrast, the A5 processor Apple used on the iPhone 4S only ran about $15 according to industry estimates.

All that said, it’ll be interesting to see how long Apple stays with Samsung for its chip production. There have been a bevy of rumors over the past few years suggesting that Apple is looking to move its business over to the Taiwan Semiconductor Manufacturing Company (TSMC). It was even rumored that Apple attempted to purchase exclusive access to the company’s smartphone chips, only to be rebuffed as TSMC wanted to keep its options open and not dedicate all of its facilities to just one product.

It was initially believed that the A6 was going to be produced by TSMC but that obviously never panned out.

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