Samsung has now bought a small stake in Sharp, giving them a much needed boost in their supply side of display panels. This could be problematic for Apple, who uses Sharp for approximately a third of their display panels, and now might get less production capacity.
Apple has been trying to move away from relying on specific manufacturers in the past year, most notably moving away from Samsung as the two companies battle each other in the legal courts. However, with Apple being limited over display production, they are still quite reliant on Sharp. The iPhone 5 stock fiasco was blamed on display manufacturers by analysts, and so clearly supply was an issue then – will it be even worse now?
Apple is stuck with the current display in the iPhone 5 if they want a guaranteed supply chain – many analysts believed that the reason for difficulty in manufacturing the displays was to do with the difference compared to previous models.
Samsung is being very tactical here, as they know where Apple’s weaknesses are. If Apple products still have a huge demand, Samsung wants to limit the supply side of it, which in turn is good for them as consumers turn to their smartphones instead.