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January 13, 2015

The Apple Watch Will Have Samsung Components

Somewhere jokes are likely already being made, in the grandest “Brokeback Mountain” tradition, about how Apple just can't quit Samsung, especially in light of new reports that suggest the Apple Watch will go forth unto the market with a load of Samsung components contained within its superstructure. Despite a flurry of lawsuits back and forth in recent days, the two companies appear to still be working together, and this new cooperative response may well spell a change in the overall market.

The reports suggest that Samsung will be particularly involved in the building of the Apple S1 chipset, which not only contains the necessary processors to drive the Apple Watch's operations, but also the necessary sensors to help gather information for the processors to handle. This news comes alongside earlier news from back in November that, starting in 2016, Samsung would be Apple's go-to provider for most of the chips involved in iPhone and iPad construction. That moves a lot of business away from Taiwan Semiconductor, which according to reports, wasn't quite holding up the way Apple would have preferred.

With reports still suggesting the Apple Watch launch date is currently set for March, preceded by some company-wide training this February, we're likely going to get acquainted with just how well Samsung's chips work in this device sooner than may be expected. But aside from that, what this all goes to show is that it's always important to go where the material can be had. Samsung is a major operation, in many respects a match for Apple, and in some respects even greater than Apple.

It may well be here that Apple is trying to buy time until it can get its own chip manufacturing operations in the works, and it may well be that Apple has simply come to realize that Samsung is a reliable source of quality hardware that can produce at the volumes Apple needs. Let's face it; Apple releases are often tremendously popular, particularly with Apple's standard user base, so Apple needs huge quantities of material at any given time just to keep up with demand. If Apple can't get that from anyone but Samsung, then it will likely turn to Samsung in a bid to not alienate its own user base. The last thing Apple likely wants is to have to tell interested buyers that it simply can't sell product that isn't on hand to sell, at least, not in any major quantity. Scarcity, or the appearance of scarcity, can have a positive effect on demand, but actual scarcity—particularly in a market with so many competitors—tends to have a negative effect. All of Apple's Watches would likely sell out, but then the size of the market would drop as those who couldn't buy turn to competitors instead. With some suggesting that the era of the smartphone may be on the way out, replaced by wearable technology and even by the tablet itself, that's a greater possibility than some may have foreseen.

Still, one point remains: Apple and Samsung may well have patched some of the differences that marked the last couple years of lawsuit and countersuit, and are settling in to face each other on an altogether new battlefield, one in which the duo is more cooperative and less combative than ever before. 

Edited by Maurice Nagle

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