Applesauce: All Things Apple
November 18, 2012

Applesauce: All Things Apple – November 18, 2012

Brand new iPhones, set to be released in a matter of months, could come with different screens, more expensive memory, and a secret hidden Easter egg which curses the existence of Samsung whenever the phone gets within ear shot of a Galaxy Note. Apple is still fighting with Samsung, but this week rumors began to fly about them sticking it to Apple where it hurts; their bottom line. Let’s all sing together as we make our way to the Applesauce.


There’s a lot that happens behind closed doors at both Samsung and Apple. While many of us, enthusiasts and tech journalists alike may feel that we have a general “feel” for a company, the fact still remains that any of us can be completely surprised by them. It might make sense to us for Apple and Samsung to be so at odds with one another that they want to sever ties altogether, but so far it appears as if that just isn’t the case. Take, for instance, the recent back and forth rumors about Apple and Samsung parting ways with one another. A rumor emerged from Asian news sources last month which said that Samsung was going to stop providing LCD displays to Apple, was going to replace Apple’s business with orders from Amazon and not ever think about the good old days when they were both so happy together. One day later, a Samsung official stepped up to refute these claims with a side of rebuke. “We did not cut the supply for Apple,” said the official in a statement, which reads as if it were accompanied by a long sigh and a slight roll of the eyes. “Because of the patent lawsuit, the industry is guessing we tried to cut the supply. We didn’t do that. We will continue to supply panels for any customer.” This week, another story popped up, suggesting that Samsung finally realized the position Apple was in a placed them over the proverbial barrel. South Korean newspaper Chsoun Ilbo cited some “unnamed sources” as saying Samsung was going to begin charging Apple an extra 20% for each of their A-chips (A4, A5, A5X, A6, A6X). Earlier reports had already made the rounds about Apple’s moves to separate themselves from Samsung’s Austin, TX-based chip division, designing their latest A6 chips all on their own, without the input from Samsung. The news about Samsung bumping up the price seemed not only to fit, but to seem somewhat appropriate.

“If you let us build this chip with you, we’ll give you a deal. Otherwise, you pay a premium to come in with your own design,” said an imaginary Samsung official during an imaginary negotiation with Apple. And yet again, one more day after this story made headlines around the tech-o-sphere, another story popped up which suggested that Samsung never put Apple over a barrel and never threatened to charge Apple 20% more; And Apple never relented at first but decided to go ahead and pay it since there weren’t any better chip makers available. There is a distinct difference between Samsung’s LCD denial and their chip “denial,” and the difference lies in the quotes. An official Samsung spokesperson gave the statement saying they’re still in the business of supplying screens to Apple. (The fact that Apple has ben ordering less and less throughout the year can likely be blamed on the winding down of the iPad cycle, a cycle which Apple slaughtered by releasing the 4th gen iPad last month) However, in this new chip story, there is no “official” word from an official spokesperson. In fact, The Street (the site many other news sources cited in this story) claim an “unnamed official” refuted these claims by saying the prices of the chips are set at the beginning of the year and are difficult to change midstream. So, while it seems like an official denouncement of this rumor, it turns out to be no different from the original rumor. There is little difference between an “unnamed source familiar with the negotiations” and an “unnamed official,” and in fact, the two could almost be interchangeable with one another. One could look to the way Apple’s been treating Google lately to understand how the company feels about relying on partners, particularly partners with whom Apple believes are stealing their product ideas. It would make sense for Apple to one day shift their chip and LCD supply to other partners, though it’s not clear who else would be responsible for taking over the ARM chip manufacturing. (Apple already has AU Optronics, LG and Sharp lined up for displays.) Tim Cook even briefly addressed the rumors of an inevitable split between the two companies, saying: “And Samsung, we continue to be a customer of Samsung and continue to have a commercial relationship.” Perhaps Apple will one day move away from Samsung, but for now, it seems as if they’ll fulfill whatever contracts or negotiations they have with the South Korean company. As for Samsung, it makes sense for them to put out the fires wherever they can. After all, many companies end up taking a hit to their stock prices when rumors emerge about a parting from Apple’s good graces. Surely Samsung has a better standing than, say, Pandora, but with Apple being such a huge customer of Samsung’s, any news about a split could send investors worrying. As for now, let’s just let these two companies talk about their differences. After all, they’re still bickering and arguing about that $1 billion judgment from this summer.

What about this guy?

Speaking of, have you heard that Samsung now wants to have that little judgment completely reversed because the jury foreman was once sued by a partner of theirs? Velvin Hogan was selected and picked for the Apple v Samsung jury this August. When it came time to pick a foreman, the newly appointed jury looked to Hogan, trusting his experience as an electrical engineer would help him guide the jury through the difficult process. Now, Samsung is saying it’s this experience which may have made him biased against them and more likely to side with Apple. There are a few reasons why Hogan probably shouldn’t have been picked for the jury. To begin with, Hogan is currently married to an attorney who works for the law firm which represented Samsung in this case. Hogan has said Sammy was well aware of who he was married to, but didn’t say anything about. Secondly, Hogan once filed for bankruptcy after going through a lawsuit with Seagate in 1993. Samsung and Seagate have a significant working relationship with one another, and since this lawsuit with Seagate sent him into bankruptcy Samsung believes Hogan would have a bias against them. “Mr. Hogan’s failure to disclose the Seagate suit raises issues of bias that Samsung should have been allowed to explore,” Samsung said when they filed their request to have the verdict thrown out. Of course, the legal teams for both companies asked Hogan and all of the potential jurors questions about their lives, the allegiances, and their legal background. The only catch is, they only asked for this information within a ten-year span. 1993 is well outside of this period. Hogan holds that he would have told Samsung had they only asked. As he tells it, not only did they not specifically ask about his bankruptcy and lawsuit, they didn’t even ask any open ended questions which could have given him an opportunity to bring it up. “Had I been asked an open-ended question with no time constraint, of course I would’ve disclosed that,” Hogan has even said he believes Samsung knew all about his being married to an attorney and his lawsuit and were just keeping this option open in case the trail “didn’t go in their favor.” It’s an interesting situation. On one hand, Hogan could have gone out of his way to interrupt the court proceedings and say “By the way, I was involved in a lawsuit with one of your partners 9 years ago. Also, I’m married to that young lady right there…” On the other hand, when companies (or anyone, for that matter) go into a trial, they are no longer playing by their own rules. Each party agrees to a set of terms and agrees to let a third party have final say in their issue. Part of these terms was to only ask the jury about the previous 10 years of their life. If they didn’t have the presence of mind to ask about this lawsuit or if they simply didn’t care at the time, then they lost their chance. Or did they? Judge Lucy Koh, who must be so tired at this point, has agreed to hear some questions from Samsung about this issue and investigate if all this confusion led to a biased decision on Hogan’s part. “An assessment of such issues is intertwined with the question of whether and when Apple had a duty to disclose the circumstances and timing of its discovery of information about the foreperson,” wrote Koh in her court filing. There is a third point to be made, of course. $1 billion is a whole heap of cash, and one gets the notion that Samsung really felt like they were going to win this one. Hogan could very well be their last life line, their last ditch attempt to get out of this thing scott free without writing a giant check to Apple. They’ll have to pay their lawyers, but it’s much cheaper than writing that damages check. And they’re more than welcome to give this strategy a shot, but some legal experts are already saying that it’s very difficult to have a verdict turned around due to juror misconduct. The American court system doesn’t ask a juror how they came to their conclusion, nor does it allow attorneys and lawyers to do the same. Therefore, it’d be difficult to prove that Hogan was biased because one of Samsung’s partners sued the pants off of him. But Good Luck either way, Samsung. It’d be impressive if they can pull it off.

New iPhones!

Normally, the last section of Applesauce is reserved for rumors of new iPads, iPhones, Macs, or Apple automobiles. (Apple-themed Ferrari, anyone?) And while it may be hard to believe, this being less than a week away from Thanksgiving, black Friday and a month-long marathon rush of retail insanity, there exists a rumor about the next iPhone 5, lovingly referred to as the iPhone 5S. And of course, this rumor came from none other than DigiTimes. Though DigiTimes is often wrong, they do seem to have fair sources. Perhaps they don’t know what to do with this information? Earlier this week, Foxconn CEO Terry Gou announced that his company is having a hard time building iPhones as quickly as Apple would like. It appears as if these claims haven’t fallen on deaf ears, and now Digitimes is claiming Apple is readying their iPhone 5S to enter trail production next month with a release sometime early in 2013. Taking this claim at face value, it sounds as if Digitimes is suggesting Apple will be making some changes and retooling the way the iPhone is built internally to lessen the load on those pro Foxconn workers. Lest we forget, reports have been coming from Foxconn about possible protests and fights breaking out in the quality assurance sector of the plants. Such a move wouldn’t be completely unfamiliar to Apple. After all, when the Verizon iPhone 4 was released, Apple took the opportunity to quietly go in and fix that whole antenna thing that supposedly caused so many people grief in the original AT&T iPhone 4. You remember the one. Apple even found a way to quietly improve the iPad 2 by using a slightly different chip configuration, resulting in better energy consumption. Using these 2 cases as a precedent, releasing a “new” iPhone early next year sounds plausible. Apple could be trying to quietly improve the anodized aluminum back to prevent scratching, or maybe even use some new lens covers to squash that whole purple haze saga. But would such a moderately improved device warrant the “iPhone 5S” moniker? Doubtful. But let’s look at another, somewhat new precedent. Apple surprised most of us by releasing the 4th gen iPad last month alongside the iPad mini. The previous iPad model had only been released earlier this year, breaking with their annual release cycle. This new, 4th gen iPad is still technically labeled as a 3rd generation iPad. The 3rd gen, Wi-Fi Retina’d iPad bears the iPad3,1 model identifier. The 4th gen Wi-Fi model? iPad3,4. (Even the iPad mini doesn’t get its own model identifier, with the Wi-Fi marked as the iPad2,5. This raises the question: Is the “new” iPad even a “new” iPad at all? If we allow ourselves to get excited, Apple could release yet another iPhone, call it the iPhone 5S, throw an A6X processor in there and avoid having to release both their smartphone and tablet in the fall of 2013. As it stands, Apple is going to make a certain audience very upset. Either they’ll release yet another iPad just months after the latest or an iPhone in the same time frame. It doesn’t seem likely that 2013 will look like 2012, with an iPhone AND an iPad launched within weeks of one another. But the first quarter of 2013 seems a little soon…maybe iPhones will get back to a summer release cycle? The Digitimes report also holds onto the hope that we’ll see an Apple TV early next year, as well as ANOTHER new iPad in the second quarter, back on their previous release cycle. As always, only time will tell, but this is the first and only rumor we’ve seen concerning this. As such…it looks mighty doubtful.

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