Samsung (NASDAQOTH:SSNLF) is reportedly putting together 200 person team to work solely on displays for Apple (NASDAQ:AAPL) devices, a report from Bloomberg states. According to Bloomberg, this team will be required to keep information with respect to Apple-related business among themselves.
Interestingly enough, Samsung is hardly the first company to have such an arrangement with Apple. LG Display, says the report, also has a similar arrangement with Apple (although the LG spokesperson that Bloomberg contacted declined to comment). Further, it was reported late last year (via MacRumors) that Foxconn, too, was planning to spend a whopping $2.6 billion to build a dedicated display plant just for Apple.
Samsung getting closer to Apple?
Bloomberg quoted analyst Jerry Kang as stating that this arrangement "implies that the relationship between Samsung and Apple has improved." He also said that this means that Samsung's display division will supply Apple with screens for future devices.
Given that Samsung is well known for building very good smartphone displays (DisplayMate's Dr. Raymond Soneira recently said that the Samsung Galaxy S6 has the "best smartphone display"), it would make sense for Apple to want to try to improve its relationship with Samsung.
And, as Bloomberg points out, Samsung is relying more on its component businesses to help drive growth and profits, and Apple brings a lot of business to the table.
It looks like this arrangement could be a win-win.
Another reason that Samsung would need an "exclusive" Apple team
Samsung is known to supply displays to Apple, but this "exclusive" team is reportedly brand new. Although it makes sense for Samsung to have a team dedicated to Apple in order to try to keep the latter's product plans behind a firewall from Samsung's own phone division, I don't think that's all there is to it.
If you take a look at Apple's job boards, you'll see that the company is actively hiring for display panel process engineers. An example of such a listing can be found in the image below:
It appears to me that Apple not only wants suppliers to sell it displays, but Apple may want to actively participate in the actual design of the panels. In that case, it makes sense that Apple would want dedicated groups of engineers with whom to work with on the design and manufacture of next generation displays for its products.
After all, if Apple is going to spend all of this money paying engineers to help develop next generation display technologies, it likely wouldn't want its rivals to be able to reap the benefits of its research and development expenses.
Apple seems to have displays well covered
Apple has always taken its displays seriously, so it only makes sense that the company will do what it must to be guaranteed ample supply of high quality displays at good prices. There seem to be a lot of players now vying for Apple's display business, and with Samsung reportedly back in Apple's display supply chain, Apple looks as though it's all set with respect to displays for its future products.
Ashraf Eassa has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.