Apple and Samsung have had an interesting relationship over the years. On the one hand, Apple buys a lot of components from Samsung Electronics. On the other, Samsung is a leading competitor in the mobile market. Some might call them frenemies, others see it as a symbiotic relationship.
From its beginning, Apple has bought components from other companies. The Apple 1 was built around the MOS Technology 6502 CPU and used third-party RAM. The Apple II used off-the-shelf parts for its expansion bus. Apple repackaged components from many other companies to add disk drives, graphics processing, displays, connectivity, and more.
Apple assembled its own computers during the Apple II era and well into the Macintosh era, with plants in various parts of the world,* but with the success of the iMac, Apple began to outsource more and more production, especially to China. (Apple has had a factory in Cork, Ireland since 1980. The factory currently produces iMacs.)
Even though Apple now designs its own processors for use in iDevices, it still doesn’t manufacture them. The A4 through A7 and A9 processors were made by Samsung, the A8 and A10 by TSMC. (Macs are still built around non-Apple branded CPUs – just like those old Apple II computers.)
How Big Is Samsung?
There are different ways of looking at Samsung, which was founded in Korea in 1938. As tech types, we’re very familiar with their smartphones and tablets, may have recently learned about their washing machines, and probably don’t know that Samsung Group builds ships and sells apparel.
Samsung Electronics is just one component of the Samsung Group, and Samsung Electronics is the #1 TV maker, #1 mobile phone maker, and #1 smartphone maker in the world, and it has been the #1 technology company.
How Big Is Apple?
Apple is the #1 technology company and #1 information technology company, but #2 in mobile phones and smartphones – behind Samsung since 2011. It has been the world’s most valuable publicly traded company by market capitalization since 2014. (Apple is #8 in the 2016 Forbes Global 2000; Samsung, #18.)
In 2010, Apple was Samsung’s second largest client, after Sony.
Could Apple Buy Samsung?
With Samsung taking a beating over its Galaxy Note 7 smartphone, which was recalled and cancelled on October 13 after several of the devices had burst into flames after just weeks on the market, I suggested in our Facebook group that this might be the perfect time for Apple to acquire Samsung, kill of its Android line, and rebrand Samsung’s televisions as Apple gear.
Why? In part because Steve Jobs saw Android as nothing less than a rip-off of its iPhone/iOS design. In Walter Isaacson’s biography of Steve Jobs, he reports that Jobs was ready to go to “thermonuclear war” with Google over the Android operating system.
If Apple were to acquire Samsung, it could take advantage of the negative press surrounding the Galaxy Note 7 to kill off the #1 brand of Android smartphones. Apple would also acquire Samsung’s semiconductor manufacturing facilities, allowing Apple to produce its own CPUs, memory, and several other components used in its iDevices, not to mention RAM and SSDs for its Macs.
Forbes reports that Samsung had a market capitalization of $161 billion in April 2016. Apple was worth $586 billion. If Apple wanted to, it’s conceivable that I could acquire Samsung – but would it want to?
Competition Is Good
It’s good for Apple to have rivals. Android provides real competition to Apple’s iOS, Samsung’s phones to Apple’s iPhone line, and if Apple were to somehow acquire Samsung, it could be seen as monopolistic – combining the two top smartphone makers into a single one.
It has actually worked to Apple’s advantage to not own Samsung. It has had TSMC produce the Apple A8 and A10 lines of processors for use in iPhones and iPads. It can bid out things like RAM, storage, and screens, forcing Samsung to be competitive or lose sales to its competitors.
Rather than acquiring Samsung, Apple should learn from its chief hardware competitor and significant component supplier, while at the same time learning from the Android world.
How Apple Could Improve iOS
For instance, when I get a notice on my iPhone about an email or a reply to one of my Facebook posts, the notification takes me right to it. But when I click on the App Store icon because it lets me know there are updates available, it brings me to the Featured page, not Updates. Why is that?
And ever since Apple changed the icon for its Contacts app, I have a hard time finding it on my iPhone. Some of those icons just don’t draw the eye, and the current Photos icon only makes sense to someone who knows color theory – not to someone looking for their pictures.
Considering that the Mail icon looks like the back of an envelope, the Phone icon looks like an old telephone handset, the Music icon looks like a pair of eighth notes, and Settings looks like a gear, someone at Apple has a good idea what helpful icons look like.
If Apple wants to remain the #1 technology company, it needs to fix some of these “dumb icon” issues, not to mention other features that Android users have and iOS users are missing out on.
And What About Macs?
A lot of people are wondering why Apple has hardly released any new Macs in the past couple years – and the “new” MacBooks was just a minor upgrade to the original 12″ MacBook. Mac sales are not doing well, they say, and it’s due to an outdated product line.
Guess what? Most Mac users have hardware older and slower than what Apple offers today. The problem isn’t the age of the product line or the performance of the product line. The problem is that so many Mac users are content with what they already have.
To our benefit, Apple is now providing annual software updates for macOS users. Free updates that make our aging Macs even more useful. For many of us, as long as we can install the update if we want to, we have less incentive to buy a new Mac.
Funny thing is, Apple has had some record sales figures for the Mac – and probably will do so again when updated models finally appear. In the July-September 2015 quarter, Apple sold a record 5.71 million Macs, and annualized sales have been over 19 million units since late 2014.
Apple has never played the games of the rest of the computer industry. When Commodore started a price was, Apple just watched as Commodore buried Texas Instruments and hurt itself in the process. As the PC world was content to rely on Microsoft operating systems, Apple continued to provide a superior overall user experience. And as the smartphone world went Android, Apple crafted its own successful vision of how a mobile operating system should work.
Apple thinks different and moves at its own pace. If someone has a faster computer or mobile device, Apple still provides a more consistent user experience. (We never had a Metro debacle and a version of Mac OS X with he kind of reputation Windows Vista had.)
I’ll stick with what I’m comfortable with (an iPhone 5 and Macs from 2008 and earlier) until there’s a reason to move to a newer iPhone or Mac. Apple will continue to move forward, and I’ll continue to follow, moving forward several years behind Apple.
You’ve got to love the long-term value of Apple products!
* Apple has had plants in Carrollton, Texas (1980-85); Cork, Ireland (1980-present); Singapore (1981-97); Fremont, California (1983-92); Fountain, Colorado (1991-96, sold to SCI Systems, which manufactured Macs for several years); and Elk Grove, California (1992-2004). In 1999, Apple subcontracted production of the iMac to an LG Electronics plant in Wales, and since then it has done very little in-house production.
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