Apple Reportedly Threatened by Samsung’s Sharp Investment
News of Samsung’s (005930) strategic investment in Sharp emerged last week, and it looks like there maybe be some added benefits for Samsung beyond strengthening its relationship with the struggling panel maker. According to market analysis firm Trefis, Samsung’s $110 million investment in Sharp is also a dirt cheap way for the South Korean company to apply pressure to Apple (AAPL), which it says is threatened by Samsung’s move.
In a research report picked up by ValueWalk, Trefis analysts postulated that Samsung’s investment could cause Apple to lose some if its leverage with Sharp, which is estimated to supply about one-third of Apple’s display panels. Sharp is also reportedly working closely with Apple on new panels for its upcoming HDTV.
Trefis believes that Samsung’s Sharp stake could be the first stage of a bigger play as its smartphone business continues to grow. While it is unlikely to impact Apple’s relationship with Sharp initially, it could have some serious implications down the road.
“While a rather small 3% stake doesn’t give Samsung enough of a leverage on Sharp to affect Apple’s interests in the near term, it does put pressure on AAPL to look for ways to bolster its display supply chain outside of Sharp Corporation, in order to protect its long term interests,” ValueWalk noted.