Are Apple and Samsung Really Breaking Up?

A Samsung official has reportedly said that the Korean company will terminate its longstanding display contract with Apple (NASDAQ:AAPL) and no longer supply liquid crystal panels to its smartphone rival. While the decision may have something to do with the recent bad blood between the two companies that have quickly come face-to-face as the leaders of the burgeoning global smartphone market, it is said to be largely based on profitability.

According to a report in the Korea Times, Samsung has decided to cut its multi-year deal with Apple “as it believes its American partner is no longer a cash-generator due to the iPhone maker’s stiffer supply-chain management structure.”

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“We are unable to supply our flat-screens to Apple with huge price discounts,” an unnamed “senior Samsung source” told Korea Times. “Samsung has already cut our portion of shipments to Apple and next year we will stop shipping displays.”

According to DisplaySearch, Samsung Display shipped more than 15 million LCD panels to Apple in the first half of the year, but the number fell to less than 3 million units in the third quarter. Samsung is reportedly not manufacturing the displays used in the iPad Mini, with Apple instead relying on LG Display (NYSE:LPL) and Sharp, among others.

“Although we are losing Apple business, Samsung looks safe as we found the right alternatives — Amazon (NASDAQ:AMZN) and Samsung Electronics’ handset division,” the official added.

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