Apple's iPad May Depend on Tablet Rival Samsung, Which Apple (Of Course) Is Suing
What's the definition of frenemy? Apple (AAPL). The company has reportedly switched its iPad 2 display orders from LG to... Samsung. Yes, that's the same Samsung that has been a major memory chip supplier to Apple. It's also the same company Apple has sued for alleged patent and trademark infringement -- and which, as a result, currently can't sell its Galaxy Tab tablet in most of the European Union.
Hmm. Nice little iPad you have there. Would be a shame if something were to happen to it.
Let's suppose for a moment that Apple isn't actually trying to alienate every other company it might possibly need to further its own ambitions. That's harder than it sounds, because Apple is acting as though its own ambitions require it to eliminate every possible competitor to its iPhone/iPad franchise, consequences be damned. If it keeps this up, companies like Samsung are going to be a lot less inclined to help pull Apple's bacon out of the fire in the future.
For all its market strength and cash on hand, Apple is terribly vulnerable to companies that may not be as profitable, but which are positioned to cause Steve Jobs and his management team all sorts of trouble. But then, desperate measures are by definition risky.
At least disco was already dead
Maybe Apple is experiencing corporate flashbacks to the 1980s. You know, when Microsoft (MSFT), Intel (INTC) and a host of (then) no-name PC vendors crashed the personal-computing party and took over. Those tasteless, third-rate barbarians.
Well, it's all happening again in the smartphone and, potentially, tablet market thanks to Google's (GOOG) Android. So Apple is lashing out at everyone, jealously trying to protect what it sees as its own creative developments. Even when, as in the past, the basics of those technologies had been pioneered by others.
I mean, remember when Apple sued Microsoft for copying the "look and feel" of Macs via use of the "desktop metaphor" Apple claimed to own -- even though it had been invented at Xerox PARC? Sort of sounds like the multi-touch interface, which had been around in a basic sense since the 1980s and was shown in full force by Jeff Han of NYU at a TED talk almost a year before Jobs announced the iPhone. Check the video below:
In Apple's eyes, Samsung made three mistakes. It aligned itself with Google. It tried to compete with Apple, even though it was a major vendor to the company. And it was proving itself successful.
It isn't us, it's you
According to DigiTimes -- which, to keep things in perspective, at times has been wrong in its reports -- LG Display was screwing up big time on building and delivering iPad 2 displays. Not only were LGD's shipments a million units short, which means a million iPads that Apple couldn't sell, but there were quality issues.
In the area of touch displays, there aren't many companies that can deliver products in massive volume. So Apple had to turn to alternate suppliers: Chimei Innolux (CMI) and Samsug Electronics. Samsung supposedly delivered 2 million display units last month.
CMI is an affiliate of Apple manufacturing partner Foxconn, but things have been better between those two companies, and Apple is talking to Foxconn rival Pegatron about building the iPad 3.
The good, the bad, and the ugly
With all the consolidation and outsourcing that's taken place over the last decade, the electronics world is increasingly neighborly, and Apple doesn't have a vast selection of business partners. Maybe it can turn away from Samsung in this case, but what happens if there's a problem with CMI? Or what if other sources of memory chips can't deliver what Apple needs?
Rather than an all-or-nothing view -- and Apple has ended up on the high and low ends of that at different times -- maybe it's time to look at a more moderated but sustainable business. There are only so many times you can roll the dice before you get snake eyes and find yourself facing a vendor like Samsung who might be ready to let you dangle in the wind.
Related:
- For Apple, No Tactic Is Too Sneaky When It Comes to Defending the iPad
- Apple Legal Victory: Court Blocks Samsung Tablet in Europe
- Did HTC Get a Patent Application that would Cover Apple's iCloud?
- Foxconn Turns to Robots to Save Apple Business
- Big Business Tries to Knock Out Startups through Special Patent Rules
- Google to Apple and Microsoft: Take That, Right in the CPU
Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.
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