Apple Deals Another Blow to Samsung

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Apple (NASDAQ: AAPL ) is doing everything it can to reduce its dependence on a competitor that once provided the Mac maker with millions of supplies. According to France 24 , Apple has commissioned Taiwan Semiconductor Manufacturing Co. (NYSE: TSM ) to produce microchips for an undisclosed number of products. The company will first manufacture the A6X processor that is featured in the fourth-generation iPad. It is currently being produced by Samsung.

Interestingly, trial production of the A6X processor is slated to begin sometime this quarter. This is an unusual move considering the success of the iPad Mini, which appears to be outselling the iPad 4 in most regions . The current iPad Mini uses the dual-core A5 processor. However, if Apple is intending to increase production of the A6X this quarter, it could be a hint that the company is planning to build other products that use the enhanced processor.

While it is unknown what those products may be, Apple is rumored to be building a wearable smartphone that can fit around the user's wrist like a watch. Mockup images suggest that the device will be no bigger than the square iPad Nano.

In building a device that small, however, Apple would be forced to sacrifice some or all elements of the App Store. The iPad Nano was deemed too small to run third-party iOS apps, which is why consumers cannot use it as a pint-sized replacement for the iPod Touch or iPad Mini. How could the so-called iWatch be any different?

If Apple intends to increase sales with a new device, it will most likely choose to build a smaller iPhone that greatly reduces the size of the body (such as the edges or the thickness of the device) while maintaining the screen size and resolution of the iPhone 4S.

Apple's A6X processor may not have anything to do with the iPhone, however. The company might simply shift production from Samsung to TSMC without increasing the number of chips that are being manufactured.

This is not the first effort Apple has made to get away from Samsung. The iPhone maker began to switch to other suppliers last fall . In doing so, Apple might have caused an unnecessary shortage for the iPhone 5.

Some critics have speculated that the shortage -- if there was one -- may have damaged the device's initial sales figures, which were lower than analysts anticipated .

Follow me @LouisBedigianBZ

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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This article appears in: Investing , Stocks

Referenced Stocks: AAPL , TSM

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