It is no secret that the original Xbox 360 contained many “off-the-shelf” electronic components, from disc drives down to chips. This was probably a factor that caused the dreaded “red ring of death,” which Microsoft found so difficult to overcome. This failure cost the company upwards of a billion dollars.

So, it would make sense to outsource most of the production of the device, and create a contract which applies all electronic failure blame to the manufacturer of that device.

As a software company, Microsoft is in the best position to do this, and recently announced the new Microsoft Surface 2.0, which is in fact being manufactured by Samsung. This means that the two companies are already venturing into this business together, so what is stopping them from doing it again, but this time with a home console?

Perhaps history may stop this from occuring, the tale of Nintendo and Sony in the early days of the original Playstation may be a factor, and will Microsoft allow a third party so close into the workings of one of their biggest money makers? Only time will tell, but we personally would welcome an Xbox that is manufactured by a tried and tested company like Samsung. Let’s face it, it’ll probably be a hell of lot more reliable out of the gate!

http://www.gadgehit.com/2011/12/04/could-microsoft-outsource-xbox-720-to-samsung/

That would be a major score for Samsung if that where to happen. They are already the biggest electronic company even if the deal doesn't happen. Also the reason for the RROD problem was because of a bad business deal between MS and Nvidia. Nvidia stopped production on the original X-Box's GPU in August of 2005 which forced MS into releasing the 360 early or risk running out of original X-Box units before the 360's release.

RROD was caused by Microsoft rushing the 360 to release before the PS3 and Wii.
It wasn't caused by "off-the-shelf components".

Its like building your science fair project the day before and expecting to get an A.

As long as Samsung don't plaster their name all over it, I don't mind ...

"Let’s face it, it’ll probably be a hell of lot more reliable out of the gate!"

I dont get it, to my knowledge Samsung products arent more reliable then Microsoft products. Samsung is more of a full feature/low price company then a reliable company. Samsung appliances after sale service is desastrous. Back order of 3+ weeks is the norm for parts needed to service their appliances. Imagine 3 plus weeks with a broken refrigerator or washer or in our case, your favorite gaming system? In the end, we stopped selling their product because our reputation was suffering from their lack of service. Microsoft gaming division deserve better then this lol.

RROD was mostly due to the use of eutectic solder instead of the lead solder used before. The lead solder was forbidden in the EU by the RoHS directive.

So much heat in a small space, and a fragile solder with mostly unknown characteristics under pressure made the first years of X360 a nightmare for Microsoft.

Xbox live is the cash cow for MS, next to peripherals. The console itself takes years before it starts making a profit.
Does this mean the 720 will be more expensive at the start, or will MS fork the extra difference? Or will we see a much smaller jump in hardware like Nintendo to make it profitable right from the get go?
It would be stupid for Samsung to sell it at base cost and assume all the responsibility.

The 360 was rushed because of a bad business deal with Nvidia. Sony and Nintendo had nothing to do with it that's just wishful thinking.  Also I doubt that MS was scared of Nintendo going into this generation since the original X-Box sold more then the Gamecube.

Are they trying to appeal to Japan?

If they were they would probably make a deal with a japanese company (like panasonic), not a korean one :P.