Is Nokia looking to dump Samsung because of a conflict of interests?

February 15, 2013
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nokiameltemi_291146549716The worst kept industry secret is that Apple is slowly but surely ditching Samsung as its component supplier due to the animosity between the two companies. Before Apple took Samsung to court about copying the iPhone, Apple was Samsung’s biggest component customer. Since the argument between the two, Apple has stopped buying batteries and displays from Samsung and is reducing the amount of memory it buys from the Korean electronics giant.

According to a “well connected hardware industry source” who spoke to AppleInsider, Apple isn’t the only one moving away from Samsung. The source says that Nokia, the world’s second largest phone maker, has started to evaluate alternative suppliers for the components it uses in its phones. Nokia sold around 85 million phones in Q4 2012, double that of Apple. But like Apple, Nokia is also in competition with Samsung. For the last quarter of 2012, Samsung sold around 107 million phones. This means that not only is Samsung the world’s largest phone maker, it also supplies the majority of the component needed by the next two biggest phone makers.

And this is where the conflict of interest occurs. Samsung claims that there is an internal firewall between its component business and its phone business. But the worry is that when Apple or Nokia design a new phone they get Samsung to make many of the bits, including many custom designed components, which Samsung gets to see in full when it manufactures them.

What if someone from the phone business pops over to the factory where the components for Apple or Nokia are being made and has a quick look at what is coming off the production line? The “industry source” even goes as far as to accuse Samsung of doing exactly that. Samsung has “a record of getting orders for next-gen components, then canceling the orders. And then they show up in a Samsung phone. When you see a Samsung (certain specialized new design for) OLED phone as you surely will, you are looking at something that was stolen from Nokia,” the source is reported as saying.

If such allegations are true then Nokia and Apple are very wise to move away from Samsung. There is the option of more litigation, but that is slow and expensive. Also trying to prove that a Samsung engineer went to a different Samsung facility to see what was being cooked up by its competition is hard to prove.

What do you think? Does Samsung steal trade secrets from Apple and Nokia, or are they just sore losers because Samsung is selling more phones than they are? Please leave a comment below to let me know what you think.

Comments

  • keyny rone lima

    claro que rouba ta na tela isso

  • Bone

    “Samsung has a record of getting orders for next-gen components, then canceling the orders. And then they show up in a Samsung phone” – that’s a pretty serious allegation, I call BS on this “industry source” who needs to put up or shut up.

    • fandroid

      Typical Android sheep comment here…

      • JustSaying

        No, this is not typical Android sheep comments. Those are really serious allegations. And he is right in calling for the industry source to put up evidence or shut up. Samsung could or could not be doing this. Anything is possible, but if you are going to open up your mouth and accuse someone of doing something this big, you better believe people will want proof!

  • sami

    They r just losers….. getting afraid of samsung dominance ………. lame excuses!!!!

    • fandroid

      Lol sami? Fandroid sheep

      • Jim Finner

        Y u so funny? Slow day at macrumors?

        • http://www.facebook.com/Ziplock9000 John Stock

          Apparently they are releasing another black rectangle this year with an innovative new idea called scrolling.. It will be all the craze with iSheep.

  • http://www.facebook.com/doru.z.dejeu Doru Zamfir Dejeu

    Mi-ar place ca Nokia sa-si revina si sa-l depaseasca pe Samsung ca tehnologie si inovatie.

    • MasterMuffin

      Aajif taalla onu hiin zupa zuba. Totally agree :D

      • gogO

        he said “i’d love Nokia to make a comeback and beat Samsung with better technology and innovation” :)

      • gogO

        he said “I’d love Nokia to make a comeback and beat Samsung with better technology and innovation” :)

        • MasterMuffin

          Yea I know thanks to Google Translate, but I just couldn’t resist commenting that :D

  • hassan

    they are just losers thats y no reason is there

  • Amit

    linked companies always have access to communication. So chances of copying are very high. But i guess they see what others do and then they do it better than the competition. So knowing what others are up to is always an upper hand.

  • tBs_Battousai

    “What do you think? Does Samsung steal trade secrets from Apple and Nokia, or are they just sore losers because Samsung is selling more phones than they are”

    I would say it’s probably a bit of both tbh…

  • http://www.facebook.com/people/Piyapon-Boonlumsion/652172051 Piyapon Boonlumsion

    I know that if your order big lot of part. you have to sign agreement. and any one who cancel order will have to pay to cancel that order.

    to keep Samsung form know next improvement is possible. Samsung randomly canceling the orders … not possible

  • http://www.facebook.com/Ziplock9000 John Stock

    You ask us.. how could we possible know?

  • cycad007

    The question really should be: Do you trust your most valuable IP & product designs in the hands of your biggest competitor?

    The smart answer is ‘No’. Regardless of their “internal firewall”…you have no assurances whatsoever. If they do steal your designs, then well…you’re quite screwed. Further, why strengthen your competition?

  • gareth2w

    It does not make good commercial sense to buy components off your main competitor, so that goes for Apple and Nokia.
    Right now they are boosting Samsungs component orders allowing them to achieve scale of volume to really sell cheaper devices, which then compete with the phones others try to sell.
    Its a case of trying to have your cake and eat it, here there are too many conflicts of interest for an honourable company (thinking of a Toshiba or Sony – these both make components and also sell products) to reliably get component orders from competitors, and Samsung hasn’t got a great reputation when it comes to competition practices (from talking to engineers who have worked there).

  • gabrelov

    Poor thing a thief and a pioneer its like the the innovator geeting booed while the thief getting praised adn to remind you all that most telecom companies popped out due to cheap nokia phones and everyone have phones back then. We are turning our backs and helping a thief escape. Don’t get me wrong I like samsung before, Android is not the enemy its Samsung.

  • gabrelov

    Samsung be fair please! I hold nothing agaisnt platform either IOS WP or droid but the problem goes down to the Manufacturer and copying is not tolerable so please be fair and make your own so the competition gets better because if you do that you are killing the smartphone industry. Thinking of it. If both nokia and apple withdraws and samsung left. Will samsung make better phones thinking it has no competitor of course there will be no challenege. Everyone having same phones gets boring. I agree that nokia and apple need to find alternatives.