People familiar with the matter are reporting that Samsung has stopped supplying mobile DRAM, NAND flash memory, LCD display, and battery to Apple. Although past iPhones contained many Samsung parts, the iPhone 5 may come with just the Samsung Application Processor inside. Experts say that there may be two reasons why these two companies decided to stop working with each other.
Apple is notorious for requesting unreasonable price cuts for parts, and most suppliers do not have a choice but to listen to Apple's demands because they have a high marketshare in smartphones. However, things are different now with increased demand from Motorola, Nokia, and other smartphone manufacturers who are all launching new smartphones this season. Apple may have lost their pricing power with Samsung.
Another reason may be that Apple simply does not want to work with Samsung anymore, in light of the recent patent lawsuits. They want to cut ties with Samsung. Samsung is the best choice in Application Processor parts, but there are plenty of other suppliers for mobile DRAM, NAND flash, and other key parts for the iPhone.