Apple and Samsung – the Ultimate ‘Frenemies’?

By Staff and Charley Moore | October 5, 2011

Apple uses Samsung chips despite raging patent battle

While Apple made Samsung’s dual-core A5 chips an integral part of the new iPhone 4S, these tech titans — the world’s largest makers of tablets and smartphones — are suing the pants off each other on almost every continent. Go figure.

As the saying goes, “with friends like these…”?

What’s the story so far? As we previously reported, Apple filed a lawsuit to remove Samsung Galaxy tablets from stores in countries across Europe, for “slavishly” copying the iPad and iPhone; thereafter, Samsung ingeniously counter-sued claiming that it was in fact Stanley Kubrick in 2001: A Space Odyssey who first envisioned the design of the tablet computer for which Apple claims a patent.

As of this post, the latest tit for tat is Samsung’s attempt to stop the new the iPhone 4S handset from being sold in France and Italy on more patent-infringement claims. Yes, it is hard to keep up with all of this factually, let alone understand the logic behind suing to stop the sale of a product that is shipping with Samsung’s own chips as a key component – huh?

At stake here is market leadership in the fastest-growing sector of the $207 billion mobile-phone market — smart phones. While Apple is the single largest maker of smart phones, with 58.3 % of the market, the combined market share of Android-enabled smartphone makers accounts for 41.7 percent, making Android king, at least for now.

So, while the legal battle rages on and Samsung prepares to file injunctions over the new iPhone in other countries, evidenced by the iPhone 4s, Apple is still one of Samsung’s biggest buyers of chips and displays.

The level of “coopetition,” i.e., competing and cooperating at the same time is stunning in the tech industry. It is especially fascinating in the smartphone market, where patent litigation is rampant and deals like Google’s $12.5 Billion bid for Motorola evidence the intense competition and costs around mobile computing technology.

A dynamic seems to be emerging where the hardware components, like chips, dispays and the like are treated ascommodities (manufactured mostly in China and often by the same company, Foxconn) and thus open to cooperation, while the user experience (U/X), software and marketing elements are the subject of heated competition and expensive legal battles.

As a whole, the fast-moving, high-stakes, and red-hot mobile technology markets lead to strange bedfellows who may collaborate on one product while at the same time fighting it out in courts around the world over another.

Stay tuned!