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Apple slips Samsung $100m in LCD priority bid

'Investment' made to ensure iBook OEM doesn't run out of displays

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Apple is to pay Samsung $100 million to ensure it gets first pick of the Korean giant's LCD production run. The payment was described by Apple as an "investment" in Samsung, but what we're really talking here is a bung to make sure Samsung keeps Apple supplied with as many displays as it needs. For its part, Samsung said the money would be used to speed up its LCD fab expansion programme. It isn't clear whether that will involve dedicating production lines to Apple. Apple is, of course, hoping for big sales of its iBook consumer-oriented notebook. Success for the iBook could also give the company's professional notebook line, the PowerBook G3, a boost too. To maintain iBook sales momentum, Apple needs to ensure a smooth supply of components to its iBook manufacturer, Taiwanese OEM Alpha Top. And that means cosying up to companies like Samsung. Apple is also keen to promote its LCD Studio Display monitor to design-conscious users. The problem here is the current price and short supply of large-scale flat-panel displays. Again, encouraging Samsung to ramp up production may help make LCDs more competitive with traditional CRT screens and this drive demand for Apple products. Paying off component suppliers to ensure consistent supply of parts isn't an uncommon move in the IT business. Earlier this year, Intel sent Samsung a cheque for $100 million to persuade the Korean company to ramp up Rambus Direct DRAM production -- Chipzilla also made similar payments to Toshiba and Micron. ®

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