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How Does Apple Inc. (AAPL) Tie Into Its Biggest Competitor?

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At this point, you are probably well aware that Apple Inc. (NASDAQ:AAPL) and Samsung are fighting it out in courtrooms all over the world. These two tech giants are doing big things, with both hoping to outdo the other.

In the smartphone market, for example, Samsung and Apple are numbers one and two. This may change at some point in the future, but for right now it is these two that are at the top.

Apple Inc. (AAPL) to be Added to Several WisdomTree ETFsall this in mind, it is important to note that Apple Inc. (NASDAQ:AAPL) and Samsung are actually tied to one another in more ways than you may believe. Before we get into this, let’s set the table by taking a look at a recent excerpt from a Digitimes Research piece:

“Samsung Electronics is expected to spend US$6 billion on its logic IC business in 2013, down from a record US$7 billion in 2012, according to Digitimes Research.

The estimate represents half of Samsung’s overall chip capex, which includes spending on its memory business, for 2013, indicated Digitimes Research. Samsung’s capex on its logic segment accounted for 57% of its total semiconductor capex in 2012, up from 41% in 2011 and 19% in 2010.”

While these numbers may be interesting, you are probably wondering what they have to do with Apple Inc. (NASDAQ:AAPL) and how the two companies are working together.

Here is the kicker. The same report estimates that “Apple accounted for 80% of Samsung’s foundry revenues in 2012.”

How crazy is that? Apple Inc. (NASDAQ:AAPL) and Samsung are anything but friendly in the courtroom. The same holds true outside the courtroom, where both companies take  jabs at one another as they jockey for position at the top of the smartphone market.

Of course, it is believed that both companies are looking to move away from this arrangement in the near future. Here is more from the same piece:

“Samsung is expected to attract more orders from IDMs and customers other than Apple, Digitimes Research said. Orders placed by its non-Apple customers, which include Qualcomm, Texas Instrument (TI), Xilinx, Marvell, STMicroelectronics, Toshiba and Renesas, collectively accounted for 20% of Samsung’s foundry revenues in 2012.”

For two companies that appear to hate each other on the surface, they sure are doing a lot of business together. While this may change in the future, for now, things are staying the same.

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