Apple CEO Tim Cook didn't want to sue Samsung because that company had a "critical role" as a supplier. However, late Apple CEO Steve Jobs wanted to go to "thermonuclear war" and he got his way. A Reuters report this weekend examined whether Jobs' war was for the best.
According to Reuters' sources, Cook "was opposed to suing Samsung in the first place." This was "largely because of that company's critical role as a supplier of components for the iPhone and the iPad".
Jobs, on the other hand: "Had run out of patience, suspecting that Samsung was counting on the supplier relationship to shield it from retribution," notes Reuters.
However, Reuters' sources also claim that the legal proceedings between Apple and Samsung have been "less poisonous to the relationship than some of the rhetoric suggests."
The article looks at the origins of the Apple Samsung relationship, then at the court battle and Apple's attempts to get Samsung products banned. It also examines Apple's plans to rely less on Samsung.
The origins of Apple and Samsung's relationship
The Apple Samsung relationship began in 2005 when Apple "needed huge volumes of flash memory chips to provide storage for the devices," writes Reuters.
Samsung held about 50 percent of the NAND flash memory market. Apple did a deal and Samsung became the supplier for the iPod shuffle, iPod nano and then-upcoming iPhone.
According to the report, the grandson of the founder of Samsung, visited Jobs' home in 2005 after signing the deal.
The success of that deal led to Samsung supplying the crucial application processors for the iPhone and iPad, notes Reuters.
The deal also gave Samsung an insight into just how big Apple thought the smartphone market was going to be. Asymco analyst Horace Dediu told Reuters: "Having a relationship with Apple as a supplier, I am sure, helped the whole group see where the puck was going."
The court battle
Samsung launched the iPhone-alike Galaxy S in Summer 2010, and in early 2011, the iPad-alike Galaxy Tab. Apple felt that these products were copies of the iPhone and iPad and filed a lawsuit in April 2011. The case spread to courts in Europe, Asia and Australia.
The US International Trade Commission aims to wrap up its investigation into a patent battle between Apple and Samsung by August this year.
Attempts to ban Samsung phones
Reuters notes that although Apple won the court battle in the US, it has failed to convince US judges to uphold sales bans because it has been unable to prove that Samsung had caused Apple to suffer "irreparable harm".
As a result, Apple has been unable to ban Samsung phones, which was its objective, according to Reuters.
Moving on from Samsung
Analysts estimate that Apple bought $8 billion worth of parts from Samsung last year, writes Reuters. This year is likely to be different as Apple switches to TSMC to build its chips.
There is an additional expense that Apple has to swallow in its move from reliance on Samsung, however.
Apple "reaped the benefit of Samsung's heavy investments in research and development, tooling equipment and production facilities" notes Reuters. Now it is Apple who is investing in these areas: "Apple is investing in manufacturing by helping its suppliers procure the machinery needed to build large-scale plants devoted exclusively to the company," writes Reuters.
Apple may not even be able to sever ties with Samsung. Analysts at Korea Investment & Securities and HMC Securities suggest that Apple won't be able to eliminate Samsung as a flash supplier because it "remains the dominant producer of the crucial chips".