Apple and Samsung Are Friendly Again, and the Competition Should Be Terrified

The technology industry’s greatest rivalry may be turning into an unstoppable collaboration. Relations between Apple and Samsung Electronics appear to be thawing since the war waged by Steve Jobs forced these onetime corporate comrades to end lucrative supply contracts and engage in costly legal battles. In August 2014, Apple Chief Executive Officer Tim Cook agreed to begin winding down the patent suits with Samsung, and the two companies are teaming up again on new products.

Samsung will manufacture the main chip for the next iPhone, as well as displays for other Apple products, and it is budgeting $14 billion for new plants and equipment that are expected to accommodate, among other things, its big new client. From this alliance, Apple gets access to one of the biggest, most sophisticated chip manufacturing operations in the world to help it continue outselling the competition. Samsung gets crucial new orders for its core chipmaking group to make up for stagnating profit in mobile phones. Just about all other companies in the industry will suffer, starting with Taiwan Semiconductor Manufacturing and SanDisk.