Samsung Display has announced that they will be ending their display contract with Apple and will no longer supply LCD panels starting next year. Lower margins on Apple devices are said to be a primary reason for the split. Apple has long used Samsung displays for their iOS devices, and in the first part of this year, Samsung Display shipped 15 million LCDs to Apple, their single largest supplier of displays. However, they shipped less than 3 million displays to Apple in the last quarter, and are reportedly not providing any panels for the iPad mini. Additionally, Samsung Display may be making room for other, higher-margin partners, as the Korea Times reports:
According to multiple sources contacted by The Korea Times, Samsung Electronics’ handset division and Amazon are increasing their orders for displays used in tablets, which is a sufficient substitute for possible losses from cutting the relationship with the iPad maker.
This comes as Apple has moved to decrease their reliance on Samsung as a parts supplier. TSMC supposedly has the contract for the manufacture of quad-core A-series processors starting late next year. LG Display and Japan’s Sharp, already Apple’s partners, will undoubtedly see their display orders from Apple increase. Both companies, along with Japan Display, currently provide the in-cell touch panels for the iPhone 5, and are undoubtedly making panels for the iPad mini. Given the severe decrease in orders for the last part of the year, it seems that Apple has already been moving away from Samsung displays for some time, and Apple's other partners should have little trouble stepping in. As relations between Apple and Samsung deteriorate, other companies move in to fill the gaps, and given the profit they stand to make on Apple's contracts, they are perfectly happy to do so.
Source: The Korea Times