People wonder why Samsung is where they are today, as if it’s some sort of mystery.
Here’s what happened: Samsung spent years mastering component manufacturing. They built factories to spit out screens, processors, RAM, batteries, pretty much everything you need to build anything that runs on electricity. When it came time to enter the smartphone market, they knew that writing an OS from scratch would be damn near impossible, but then Google came along and gave them a free lunch with Android. Fast forward a few years and the average Samsung product has 90% of its components from Samsung itself.
Enter HTC. Speaking to members of the press today, Jack Tong, President of HTC North Asia, told the story of the HTC Desire and how it originally shipped with an OLED display. After seeing some success with the product, Samsung all of a sudden couldn’t supply HTC with that particular panel anymore, and the phone had to be redesigned.
Tong even admits: “We found that key component supply can be used as a competitive weapon.” So what’s HTC going to do about it? There’s not much they can do except hope that Taiwanese companies get their act together so they can help their fellow countrymen.
And while I’m on the subject of components, I’d like to bring up Apple. They don’t do what Samsung does, meaning they don’t own factories, but instead they throw money at the people who know how to build components. That money is then used to secure supply. In other words, Apple gives people all the stuff they need to build them things, and then said people agree to give Apple all the things they then make for a certain span of time.
At some point Apple should learn how to make their own stuff, but that’s not how they roll.
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