Last updated: October 22, 2021 at 07:20 UTC-02: 00
Samsung investors are concerned about Apple’s relatively recent insistence on buying Chinese. “Relatively” meaning it’s not entirely new, but it’s only recently that Cupertino has ostensibly made cheap shopping its top priority.
The writing has been on the wall for quite some time now, however. Apple is by far the most profitable smartphone company. And its investors are as insatiable as any, which means that its potential for growth in the mobile space would sooner or later turn into lower costs.
This is exactly what appears to be happening now. Particularly in the display segment, where Chinese giant BOE recently snatched up an additional 15 million panels for Samsung’s iPhone 13 series. Indeed, Samsung stock has fallen in recent weeks, plunging more than 9% since that point in September.
Apple’s number one priority is to buy cheap, and Samsung isn’t cheap
One of the advantages of all of this is that Apple cannot continue to compete in the premium smartphone segment while continually cutting costs. In fact, that’s a big part of what has already given Samsung a big head start in the foldable market. But in terms of winning back lucrative supply deals, there’s a limit to what Samsung can achieve. As evidenced by its own portfolio of devices, which has seen significant price drops across the board this year.
Samsung isn’t the only Korean company whose medium-term profits are being challenged by Apple’s growing trend to buy cheap components. It’s certainly the biggest of the bunch, mind you, but rival LG has had similar issues lately.
As a result, LG’s stock has followed a similar trajectory to Samsung’s over the past month. Just a little worse, as has become the tradition when comparing these two to any measure in recent years. Specifically, LG’s valuation over the past 30 days is double-digit, as a percentage.
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