Actually, this is correct. In many electronics companies the divisions internally can operate as profit centers, wherein they are incentivized by making the largest profits for themselves. If Apple can offer more for flash to the Samsung flash division than the phone division at Samsung, then business goes to Apple.
The numbers check out.
Related readings
"Using transfer pricing in decision making - Nuts and Bolts of Business": http://bit.ly/f0xBb0
Exactly. In large asian corporations which have their hands in a lot of different industries and spaces, different divisions often act and negotiate independently. This is so that no one division can bring the whole company down and other companies can maintain a level of trust with that division as a supplier, regardless of whether another division might be competing with those companies.
Failure to respect these divisions is one reason Sony failed in the consumer electronics space against the iPod. It allowed the entertainment and media side of the company to impose ATRAC copy protection and other kinds of DRM on the consumer electronics division of the company, which resulted in a much less compelling (compared to the iPod and other music players which used less draconian DRM measures) network walkman line of products.
The numbers check out.
Related readings
"Using transfer pricing in decision making - Nuts and Bolts of Business": http://bit.ly/f0xBb0
Managerial Accounting Transfer Pricing Lecture Notes, UIC: http://bit.ly/fhaoUM