The love-hate relationship between Apple and Samsung is taking a turn for the worse has the company's lawsuits against each other escalate, but Apple may finally pull the plug on the partnership as it shops for other partners.
Apple, the US-based consumer electronics giant, makes the ubiquitous iPod media-player, and has jolted the mobile industry with its iPhone series of smartphones. It has since created the tablet industry from scratch with the launch of its iPad in 2010.
But the company relies on Samsung to make core components for all of these devices. At the heart of these devices is the A4 and A5 processors that Apple designed, but Samsung manufacturers.
Like most consumer-electronics Apple also relies on Samsung to supply the DRAM, or memory inside the device.
To make matters more interesting, Samsung has its own consumer-electronics arm -- Samsung Electronics -- that spins out products nearly identical to Apple.
The iPhone competes against Samsung's Galaxy S series smartphones, while the South-Korean company recently rolled out its Galaxy Tab tablet -- a direct competitor to the iPad and iPad 2.
While Apple has downplayed the rivalry publically, with COO Time Cook calling Samsung a valuable partner, its actions would indicate otherwise.
Both companies have been filing lawsuits with the latest emerging just today, with Samsung demanding to see samples of the next iPhone and iPad before they hit shelves.
This, in response to Apple's April patent suit against its rival, alleging that Samsung chose to copy Apple's technology, user interface and innovative style, rather than innovate and develop its own technology.
Court-room drama aside, analysts believe that Apple is also lining itself up to find another foundry partner, a move that sever the largest tie it has to Samsung.
That business could go to Intel as the two Calif.-based companies talk behind closed doors.
We believe that Intel has also stepped up its efforts to get into the foundry business. In particular, Intel is vying for Apple's foundry business, Piper Jaffray analyst Gus Richard told clients this week
Samsung appears already to be pushing out orders for equipment as customers re-allocate spending to other vendors.
We expect to see cancellations in CY11:Q3 as Samsung's largest chip customers reallocate demand to other vendors, Richard says. In addition, capital spending at the foundries has been too strong for too long and we expect to see a pause in this market as well.
With Apple accounting for $5.68 billion, or 4 percent, of Samsung's $142 billion in revenue, last year, a shift in foundry's could mark the end of ties between the companies as relations continue to sour.