Samsung's Sharp Investment Is Another Thorn In Apple's Side
Quick Take Samsung buys a small stake in Sharp in order to secure a steady supply of display panels. Apple, which sources around a third of its display panels from Sharp, will face increased competition from Samsung for Sharp’s production capacity. This is a by-product of increasing competition in the overall smartphone industry, which could cause Apple to lose leverage over its tightly controlled supply ecosystem thereby endangering its famed high margins. Foxconn’s potential investment in Sharp might assuage Apple’s concerns to an extent. Samsung’s recent investment in Sharp could mean trouble for Apple down the road. The iPhone maker has been rumored to be diversifying its supply chain away from Samsung in order to reduce its dependence on a company that is also its fiercest rival in the mobile device space. But Samsung’s decision to buy a 3% stake in Sharp, a struggling display maker that is also one of Apple’s bigger supply partners, complicates its plans.