Samsung, Apple Going From Frenemies To Enemies

| About: Samsung Electronics (SSNLF)

Samsung (OTC:SSNLF) has had a great run lately.

While the South Korean Won has been rising in value against the dollar, shares in SSNLF have actually been increasing in value, up about 16% so far this year.

Some of those gains come from Samsung's being the big dog in the Android phone market. Some come from Samsung being a key supplier to Apple (NASDAQ:AAPL) .

All this puts the Korean company in a very unique position. As a vertically-integrated semiconductor and parts supplier, it has far more control of the mobile market than any company not based in Cupertino. And it has not been afraid to use that control to its advantage.

But the strength of the Apple relationship is now open to question, as Apple prepares to launch an iPad Mini on Wednesday that will reportedly shut Samsung out of the supply chain and as the two companies continue sparring in court over patents.

As much as reporters tend to focus on the Google (NASDAQ:GOOG) vs. Apple match-up in mobility, the one between Samsung and Apple may in fact be more interesting. Samsung is looking to break away from its dependence on Google by signing up as a Windows Phone OEM and working on its own mobile OS, Bada. (Yes, if Bada supports Microsoft's search engine it might well be called Bada Bing.)

But the Samsung-Apple relationship is not all about Samsung playing defense. It's also playing offense, prepping flexible screens that could put pressure on Apple - as competitors if it wants to cut Samsung off, as frenemies if it decides it needs the technology.

Rumors on what is in the iPad 3, and whether there will in fact be an iPad Mini, are just two days from being confirmed or denied. If the new Apple device launches with a Samsung screen, it's clear sailing ahead. If it doesn't, there could well be pressure on the shares, but bears should note that Samsung has serious market defenses at its disposal.

Disclosure: I am long AAPL, GOOG.