Samsung slaps Apple with 20 percent component price hike

Taking another company to court over frivolous matters not only gets you a lot of bad press but it's also a bad idea if that company is one of your largest suppliers. In the news today is a report that Samsung Electronics has hiked the pricing for manufacturing the application processor for Apple's iPad and iPhone by 20 percent. Last year Apple purchased 130 million mobile procesors from Samsung and this year the number is anticipated to hit over 200 million.

Apple protested the price hike, but had no choice to accept it because there's no supplier that can replace Samsung.

Samsung Electronics , the world's largest technology firm by revenue, raised the price of mobile processor supplied to Apple Inc. AAPL -0.44% by 20% recently, Chosun Ilbo reported Monday, citing a person familiar with negotiations between the two tech giants.

"Samsung Electronics recently asked Apple for a significant price raise in (the mobile processor known as) application processor," the person was quoted as saying in the report. "Apple first disapproved it, but finding no replacement supplier, it accepted the (increase.)"

The two firms have started to reflect the new supply price recently, the report added, citing the same person.

Samsung Electronics has a long-term contract to supply processors to Apple until 2014.