Has the race to secure links in the supply chain begun?

As Samsung continues to dominate in global smartphone sales, the company’s supply chain is feeling the pressure.

According to recent figures released by Gartner, Android is the preferred operating system, and South Korean firm Samsung holds 30.8% of the global market share for smartphone sales. With estimated shipments of 64.7 million units in comparison to Apple’s 38.3 million in Q1 2013, it is not hard to see why manufacturers and those supplying the parts and labor to assemble the company’s products might be feeling the strain.

before that please read our report on Asia/Pacific Only Region To Show Mobile Phone Sales Growth Last Quarter

The smartphone market is worth $253 billion, and both Apple and Samsung are jostling to take the largest slice of the market as possible. However, as reported by the Reuters, this means that manufacturers able to cope with rising demand are in short supply — and so Samsung is now courting some of Apple’s main parts suppliers.

Although Samsung produces much of its parts in-house, the company has approached Apple partners including Sharp — of which the firm now owns a three percent stake in return for investment of $110 million — which is able to manufacture a range of screens suitable for mobile gadgets. In addition, Samsung placed an order with Sharp for LCD screens suitable for the Galaxy range, although according to the publication, this order has been cancelled, at least for now.

Samsung is now using U.S.-based Qualcomm’s chips more often in the flagship Galaxy S. Tech firm Toshiba and Gorilla Glass designer Corning Inc both supply parts for Apple and Samsung products.

The overlap between Samsung and Apple is currently limited and unlikely to prove a disruption. However, as more consumers adopt mobile gadgets worldwide and the fight to dominate this market continues, we may see a fight between the two giants that doesn’t involve patents.

“The next round of the post-patent battle for them will be over component supplies,” said Lee Sun-tae, analyst at NH Investment & Securities told Reuters. “Who wins access to the best performing components in class in large quantity — that’s the key … and explains why Samsung is shopping for components more than ever.”

Last Updated on by Vamsee Angadala

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