Apple Will Still Get By With a Little Help From Its Friend - Samsung

A major point from last week and indeed from the earliest days of the lawsuit questioned the impact suing their top chip supplier might have on Apple and future products. Perhaps this would drive the two sides toward a settlement and bring a premature end to the court proceedings. I think even the Judge Koh thought so as she pushed the leadership of the two companies to try to make nice.

But there was no settlement. Filing suit was one thing, but will the bitterness of the jury's $1B pill affect Samsung's desire to supply components to help Apple keep ahead of consumer gadget trends? In a word, no.

There are many ways to say, "No." to the argument that Samsung will disappear from Apple's supply chain. First, Apple is a huge consumer of chips and two of Samsung's mainstays - NAND flash and DRAM - factor heavily in all Apple platforms. As a corollary to the first point, Samsung is dominant in flash technology and to a large extent DRAM as well. They are best positioned to supply the volumes Apple consumes and have the economic scale to continue to make money no matter how much pricing pressure Cook & co. can apply. Second, Apple depends on Samsung wafer supply - i.e. semiconductor foundries - even for its own processor designs like the current A5 and A5x devices. And there is a flipside as Samsung can keep big non-memory fabs running at full capacity for its own processors and system-on-chip devices. That helps Samsung stay on the bleeding edge of silicon manufacturing for silicon processes (something it definitely needs no help with on the memory side) without the pressure of filling the manufacturing lines only with its own products.

For a third reason, we can take a look at the corporate culture inside Samsung. They are well known for internal competition - even within divisions. The philosophy centers on setting multiple teams off with the same goal. It could be to create the next generation of non-volatile memory. The best one wins. It operates a bit like a VC knowing that most R & D efforts will never see the light of day. Some reporters and media confuse this believing that if Samsung is pursuing, let's just say phase change memory, that the technology is a winner and heralds a paradigm shift for the particular market space.

So between divisions at the company, we should expect no loyalty or favors. Like Olympians, each will do what it takes to win. Samsung is surely not the first system manufacturer or brand that makes its business decisions without loyalty to a sister component division, but they are aggressive about it.

Samsung has a proven family of mobile processors (sometimes known as APUs for applications processors, but that requires a history lesson to explain ) that powered generations of iPhones and iPods. The product line is now marketed under the Exynos brand.

But you don't need to take my word for it. Just look at the line-up of processors Samsung intends to use in its recently announced Ativ Smart PC tablets. The table I've shown below was compiled by Jason Inofuentes at AnandTech .

List compiled by Jason Inofuentes (AnandTech)

In current Galaxy Tab models, Samsung, the CE company, uses Nvidia Tegra 2. Of course, there are a few Samsung platforms floating around that use the chip divisions processors since the Note sockets are populated by Exynos processors.

So Samsung has or will use just about every available mobile CPU from Intel to Qualcomm. Of course, it's a bit apples and oranges to talk about X86 along with the mobile processors. Obviously, Samsung is a major laptop brand and uses Intel X86 processors in those. For any Windows-based machine, Intel is going to be somewhere in the mix. But just looking at the mobile platforms powered by ARM-based devices, Samsung consumer electronics deploys just about every mainstream processor brand on the market.

So my reputation according to my daughters is well-deserved. Just call me Dr. No.