Although Samsung (SSNLF.PK) and Apple (NASDAQ:AAPL) remain rivals in the mobile device market and in the courtroom, the Korea-based manufacturer is one of Apple’s key component suppliers. Apple’s continued dependency on Samsung was highlighted in a new DisplaySearch report cited by ZDNet Korea, via CNET. DisplaySearch is a market research firm that focuses on the display supply chain.
According to DisplaySearch’s data, Samsung retook its position as the No. 1 supplier of Apple’s 9.7-inch iPad Retina display panels in the first quarter of 2014. Samsung shipped 5.2 million display panels in the March quarter for 62 percent of the market, said DisplaySearch. Meanwhile, LG Display (NYSE:LPL), another major panel supplier for Apple, saw its share of the 9.7-inch Retina display market drop to 38 percent in the first quarter of 2014 from 61 percent in the fourth quarter of 2013.
The 9.7-inch 2,048-by-1,536 resolution displays are used in Apple’s flagship tablet iPad Air, as well as its legacy iPad with Retina display. The iPad with Retina display replaced the iPad 2 as the most affordable 9.7-inch iPad in March.
According to data from market research firm IDC, Apple shipped 16.4 million iPad units in the first quarter of 2014, a decline of 16.1 percent from the year-ago quarter. However, despite the decline, Apple maintained its lead as the top tablet vendor in the world, with a 32.5 percent market share. During the company’s last quarterly earnings call, Apple Vice President of Finance Luca Maestri pointed out that iPad inventory adjustments also impacted the shipment numbers.
“[O]ur iPad results and the comparison to the March quarter last year were heavily influenced by channel inventory changes,” said Maestri, according to an earnings call transcript provided by Seeking Alpha. “Specifically, this year we saw 16.4 million iPads into our channels and sold through almost 17.5 million reducing our channel inventory by 1.1 million units. Last year we sold over 19.4 million iPads into our channels and sold through 18 million, and therefore increased channel inventory by 1.4 million units. As a result, the year-over-year sell through decline was only 3 percent compared to the sell in decline of 16 percent.”
While Apple continues to dominate the worldwide tablet market, Samsung also reaps some benefits as Apple’s top Retina display and A-series chip supplier. The two companies recently concluded a patent-infringement trial in California that resulted in a $119.6 million damages award for Apple and a $158,400 damages award for Samsung. Although Apple took home a larger damages award, the verdict was widely viewed as a symbolic win for Samsung, since Apple had been seeking around $2.2 billion in damages.
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