Samsung Holds the Chips in Apple Product Battle

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Oct. 25 (Bloomberg) -- Bloomberg News’ Adam Satariano discusses the common ground in the battle between Samsung and Apple… chips and examines initial sales of the iPhone 5S and 5C in China as it pushes into emerging markets. He speaks on Bloomberg Television’s “Bloomberg West.”

The south korean smart phone maker samsung reported record third-quarter innings.

Net income rising.

The company's surging profits come from its success with lower and consumers and demand for the processors that samsung manufactures.

Apple is making a big push into emerging markets today.

The iphone 5s and 5c are going on sale in new countries, including russia and india.

I bring in adams atari.

-- adam.

They are fierce competitors in the marketplace.

They are suing each other in court.

They have a beneficial business relationship where apple buys loads of chips from them.

You wonder how much of an advantage samsung has because he uses its own chips.

Samsung is vertically integrated.

They control the whole aspect of making a device.

All these different things are able to squeeze a more economical model and really squeeze out profits.

Has apple considered making its own chips?

They design the chip in cupertino, then work with suppliers like what has been samsung to manufacture for them.

Will they consider doing the manufacturing themselves?

I don't think so.

That's a huge endeavor to do that.

You are talking about billion- dollar facilities that have to be built.

Apple has shown that they prefer to hire other companies like foxconn to assemble them or samsung to make the chips.

We know the new iphones have been on sale in china for a few weeks now.

How are they doing?

Apple put out the numbers showing they sold 9 million initially.

They report results on monday, which will give us a better sense of how that initial rush was.

The big thing that people should be waiting for is not going to come until january, when they report the results from how the holiday quarter went.

What about these other countries?

How much are they going to matter to apple?

Apple has shown that they are not going to compete at the low end.

You mentioned russia.

There are iphone cost is equivalent of $800 -- their iphone cost is an equivalent of $800, a monthly salary.

Samsung also seems to be moving faster than apple when it comes to new devices.

They recently got a patent for glasses.

Are they just trying to beat apple to the punch, or is apple behind?

That might be part of it.

I would be waiting to see how sales of these watches go so far.

Some of the reviews were very mixed.

It remains to be seen whether or not there is a real moneymaker for them.

Apple has been reported as working on that area as well.

I'm still waiting to see a company that really turns that into a billion-dollar business.

Adams atari on oh -- adam satariano, thank you.

This text has been automatically generated. It may not be 100% accurate.

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