Samsung sheds Apple planet for Galaxy plan

By Jonny Evans

It appears high-level meetings between Apple [AAPL] COO, Tim Cook, and Samsung executives have failed to reach a happy finish, with the rift between the two firms growing too wide for Samsung to cling onto its biggest customer.

[ABOVE: Samsung Galaxy meet iPhone. Similar? You decide...]

Sayonara, Samsung

Apple has introduced changes across its component supply chain in recent months, winnowing out Samsung from these lines.

For example, Pegatron has reportedly won production orders for the iPhone 5 and iPad 3.

There are also claims TSMC has taken over Samsung's previous position as manufacturer of Apple's A-series chips as used in IPhones, iPads and other devices. TSMC returned a third quarter of decline in it's chip business, but seems set for a sudden turnaround come the late 2011 debut of the iPhone 5.

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Apple has also transferred a large slice of it's flash memory component orders to Toshiba from Samsung, putting the former component supplier within a hair's breadth of surpassing Samsung's memory market lead. Toshiba now accounts for 35.6 percent of that market.

Apple's Tim Cook has previously declared that firm to be Samsung's biggest customer, spending billions with the Taiwan-based firm. Apple's supply side changes have already begun impacting Samsung profit margins, some say.

The war between the two old friends exposes Samsung to another unpredictable risk: How long will Samsung's chosen OS remain free?

The true cost of Android

Patent litigation against Android smartphone makers is gathering intensity. Apple is suing HTC, Samsung and Motorola, for example.

Google is also fighting a lawsuit from Oracle, which could hamper Android proliferation and demand Google cough up billions of dollars in damages.

Developer Google faces a string of patent abuse lawsuits, any one of which could eventually prevail, and in doing so could force the firm to levy a licensing fee on the slightly 'open' OS. And Google management are visibly rattled.

Apple, RIM and others invested billions in acquiring Nortel's extensive wireless patent portfolio to help fight the Google Android menace, prompting Eric Schmidt, Google executive chairman, to say (at this week's Allen & co event): "I'm worried and or disappointed that we've gotten to this point in the industry."

That last remark suggests Google, may even turn to the DOJ in order to argue that its smaller competitors are working anti-competitively in requiring the search giant pays for the technology patents it bundles for free inside Android.

Meanwhile, Android ally, Samsung, seems set to cede its important position within Cupertino's Apple-planet building strategy in favor of its ambitions for the tablet/smartphone market with its Galaxy range of visibly Apple-inspired devices.

And Apple is unlikely to devolve too much of its component or future product production to a single partner company ever again.

Will Samsung and Apple find a way to patch things up? Let us know in comments below. I'd also very much like to invite you to follow me on Twitter so I can let you know when I post new reports here first on Computerworld.