Apple’s (s aapl) relationship with Samsung is on the rocks, according to an investor note from Jefferies analyst Peter Misek on Tuesday. Based on a recent trip to Japan and checks with suppliers made during that trip, Jefferies says Sharp is benefitting from the Samsung falling-out, picking up impressive windfalls in terms of share of iPad 3, iPhone 5 LTE and iTV display production.
The iPad 3, iPhone 5 LTE and iTV are all unannounced products at this stage, of course. The iPad 3 has been the subject of quite a few recent rumors, including reports on Monday that suppliers were working on issues related to the manufacture of iPad Retina Displays, along with code findings in iOS 5 that point to the imminent release of a next-gen tablet device. The iPhone 5 is rumored to have a larger display, and the iTV has been the subject of plenty of speculation since making an appearance in the recent Steve Jobs biography.
Jeffries also cut its fourth quarter estimates for iPad shipments from 17 million to 14 million, which is still ahead of the Wall Street average of 13 million, following reports Apple was reducing its iPad component orders. Following its stock checks, Jeffries believes “reports have overstated the iPad weakness as they have not accounted for inventory at Hon Hai [Foxconn], iPad 3 production starting in CQ4 [fourth calendar quarter] and Sharp’s share gain.”
Parts sourcing for iPad 3 production has been reported to be already underway. DigiTimes reported last week that Apple had ordered two million display panels from Samsung, LG and Sharp in November, adding to an earlier order for one million in October. The components, according to DigiTimes, were intended for assembly at Apple’s final product manufacturing partners in January. And Monday, a DisplaySearch report also claimed the iPad 3’s 2048×1536 display had entered production, at Samsung, LG and Sharp.
Apple and Samsung sat down in October to discuss the long-term supply relationship between the two companies, but if Misek’s and other reports of Apple attempting to diversify its supplier chain for upcoming devices prove true, it looks like that relationship is indeed becoming harder to maintain. The legal battle between the two companies is really only becoming more pitched, with Samsung needing to make major hardware changes to its devices in Germany, and injunction requests flying back and forth around the world.