Samsung said to create Apple team in displays to boost ties

[SEOUL] Samsung Electronics Co created a standalone team of about 200 employees working exclusively on screens for Apple Inc products as the world's biggest technology companies strengthen business ties, people with direct knowledge of the matter said.

The team at Samsung Display Co, which provides screens for iPads and MacBooks, helps develop products and is only allowed to share information about Apple business within the group, the people said, asking not to be identified because the details aren't public. The team formed April 1 and also helps with sales, the people said.

Samsung is relying more on its display and semiconductor units after falling into a tie with Apple for leadership of the global smartphone market. Relations between the companies thawed after they dropped all lawsuits against each other outside the US, and Apple is now the biggest external customer for Samsung components, one of the people familiar said.

"The new exclusive team for Apple implies that the relationship between Samsung and Apple has improved," said Jerry Kang, an analyst at Englewood, Colorado-based researcher IHS Inc. "This also suggests that Samsung Display will win screen orders from Apple, such as for the Apple Watch."

The companies each spent hundreds of millions of dollars in legal fees across four continents after Apple accused Samsung of copying its iPhone designs. Samsung countered that Apple was using pieces of its wireless-transmission technology without permission.

In order to strengthen management, Samsung Display split its liquid-crystal display and organic light-emitting diodes units as of April 1, said Kim Ho Jung, a spokesman for Samsung Display. He declined to elaborate.

The display business is 85 per cent owned by Samsung Electronics, while the rest is held by Samsung SDI Co Samsung Display supplies Samsung's Galaxy smartphones as well as those by other vendors.

LG Display Co, a rival supplier of panels to Apple, also has a separate unit focused primarily on business with its biggest US customer, another person familiar with the matter said.

Jean Lee, a spokeswoman for LG Display, declined to comment.

In addition to displays, Samsung is developing a closer relationship with Apple in semiconductors.

Samsung will make Apple's A9 processor chips at its Giheung plant in South Korea for the next iPhone model, regaining a customer previously lost to Taiwan Semiconductor Manufacturing Co, people familiar with the matter said earlier this month. TSMC last year ended Samsung's monopoly over contracts to make iPhone and iPad chips.

The Galaxy maker said April 7 its first-quarter operating profit decline 31 per cent to 5.9 trillion won (S$7.3 billion) in the three months ended March. With earnings falling for six straight quarters, the company is banking on Friday's debut of its new Galaxy S6 models to lure back buyers and drive sales of chips and displays.

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