While Samsung Electronics (005930) lost out to Apple (AAPL) in the high profile patent trial, wherein the U.S. court ordered the former to pay $1.05 billion for patent infringements, experts aver that the ongoing partnership among the two companies for supplying components will remain intact.
A report from Reuters indicates that at an emergency meeting convened in Seoul Sunday, the South Korean handset manufacturer's top-tier leadership decided to maintain the firewall between its handset business and component operations.
This clearly shows how much value Samsung accords to its billion dollar supply contract with Apple.
Apart from being the sole supplier of micro processors for the iPhone and iPad, Samsung also supplies DRAM and NAND-type memory chips and flat screens used in popular Apple gadgets, Reuters stated.
An estimate from Morgan Stanley pegs Samsung's component sales to hit $13 billion next year and usher in $2.2 billion in operating profit.
Analysts believe that this symbiotic relationship will not be jeopardized by either of the parties.
"Apple needs Samsung to make the iPhone and iPad. Period. Samsung is the sole supplier of Apple's processing chips and without Samsung, they can't make these products," James Song, an analyst at KDB Daewoo Securities, told Reuters. "Samsung might be considering lots of options to leverage its components business' importance and pressure Apple, and Apple could be also well aware of this."
The same views were reiterated by another expert even as news of Samsung's plans to contest the U.S. court ruling made headlines.
"Apple isn't that stupid (to risk its Samsung parts deal). Apple's agreements with Samsung will ensure that Samsung has no choice but to comply and supply," Florian Mueller, consultant, Intellectual Property, posted on his blog, FOSS Patents.
"Also, Samsung's other customers would lose faith if it turned out unreliable. And since Apple threatened Samsung with litigation two years ago, it's had plenty of time to identify alternatives," Mueller added.
The news holds consumer interest as Apple is tipped to release the next generation iPhone, largely considered as "iPhone 5," at a September 12 event.