Samsung has further tightened its grip on the smartphone display component market by acquiring a significant stake in Corning, the maker of the widely used Gorilla Glass.
The deal initially involves Corning buying out Samsung's stake in a joint venture for making LCD glass. As a part of that same deal, however, Samsung will receive $1.9 billion worth of preferred shares.
Samsung has the option of converting these shares into a 7.4 percent stake in Corning, which would make the Korean company the biggest Corning share holder around.
Another part of the deal involves Corning supplying Samsung with its LCD glass products for the next 10 years. Corning, for its part, expects this new supply deal to be worth $2 billion of additional annual sales.
The news of these strengthened ties between Samsung and Corning will be of concern to the former company's rivals, such as Apple, HTC, Nokia and Motorola. All use Corning's toughened Gorilla Glass product to produce robust displays for their smartphone and tablet products.
Beyond that, analysts now believe that Corning and Samsung will co-develop and co-test key new technologies, such as new types of plastic panels, which will be instrumental in the development of wearable devices.
It could give Samsung an edge over Apple in smart watch development. If this Corning partnership bears fruit (as there's every chance it will), Apple could become dependent on Samsung for a key component in its much-rumoured iWatch device.