hankyoreh

By Kim Jae-sup

In October, U.S. firm Apple confounded expectations of the release of an “iPhone 5,” instead launching the “iPhone 4S,” which many say is not a significant departure from the iPhone 4. Consumers and investors were disappointed, and there was even talk of the end of innovation at Apple. Why did Apple launch the iPhone 4S instead of an iPhone 5?

Industry rumors have emerged that the reason Apple was unable to release the iPhone 5 was due a problem with stability of a key part, whose production had been newly assigned to a Taiwanese company. This story has it that the Taiwanese component failed to meet the required stability standard during tests conducted before mass production of the iPhone 5, making delay of its release inevitable. In a situation where Samsung Electronics was rapidly encroaching on the smartphone market with products like the Galaxy S II and the Galaxy Note, Apple could not put off the launch of a new product forever.

Samsung Electronics, too, is not denying the rumors.

“As far as we understand, Apple newly assigned production of two key components for its iPhone 5 and iPad 3 to a Taiwanese company, but these showed problems such as overheating during final tests,” said one Samsung Electronics official.

Apple is also reported to have pushed back the release of the iPad 3, which had been expected in March next year, by at least three months because of the problem. Since early this year, Apple has followed a strategy of assigning production of components that had been made by Samsung Electronics to Taiwanese firms instead, in addition to its filing of large-scale patent suits as a means of shaking Samsung off its tail in the smartphone and tablet PC markets. 　

Some are predicting that this episode will lead to Samsung Electronics being regarded as even more competitive in making chip components. Samsung chips are used in the current iPhone 4S, just like the iPhone 4. Whenever foreign media have reported that Apple intends to assign production of the iPhone 5‘s application chip to Taiwanese firm TSMC, Samsung Electronics has commented that this will not be easy, considering the performance and stability of Apple’s iPhone and iPad. Such comments were based upon Samsung‘s superior technological capacity.

Apple’s new CEO Tim Cook‘s two-hour meeting with Samsung Electronics’ Chief Operating Officer Lee Jae-yong following former Apple chief Steve Jobs‘ memorial service is also drawing renewed attention.

“It does not matter if Samsung Electronics and Apple try to fight each other, it is no use if they miss opportunities in the market,” said a Samsung Electronics official. “In light of the fact that COO Lee Jae-yong made a separate report to the chairman, [Lee and Cook] may have talked about discussed plans that would be beneficial to both companies.”

Please direct questions or comments to [englishhani@hani.co.kr]