[KoreanTimes] Apple Manipulating Flash Prices

1548 Views 25 Replies 21 Participants Last post by slothfish, Dec 2, 2009

DuckieHo

Discussion Starter · Nov 30, 2009

http://www.koreatimes.co.kr/www/news...133_56338.html

Quote:

There are growing complaints in the semiconductor industry that Apple, the "smart" phone maker extraordinaire and major chip buyer, is manipulating NAND flash memory prices through its "questionable" purchasing strategies, industry sources said Sunday.

And there is not much that Samsung Electronics, the world's biggest flash memory maker, and Hynix Semiconductor, the industry's No. 3 player, can do about Apple's moves, as the American company increasingly gains leveraging power due to the global popularity of its iPhone handsets and other consumer electronics products.

The summary of the arguments goes as this ― Apple is contributing to the suppression in flash memory prices by ordering more chips from semiconductor makers than the amount it actually buys from them.

1 - 20 of 26 Posts

[Teh Root]

· #2 · Nov 30, 2009

eh, they just need more fab's to keep up with the universal demand.

RonindeBeatrice

· #3 · Nov 30, 2009

Apple forcing memory costs down? I'm not terrifically against this.

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justarealguy

· #4 · Nov 30, 2009

2

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Originally Posted by RonindeBeatrice

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Apple forcing memory costs down? I'm not terrifically against this.

Yeah but anyone ordering more than they actually buy is a bit of a d-bag in my book.

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Whodie

· #5 · Nov 30, 2009

while I despise Apple, this article is BS

Last year when scrap steel was $300+/s.t. and steel mills were giving customers 60-70% OTD it was common for manufacturing companies to order 2x or 3x what they actually needed, knowing full well they would only see 50-60% of it when they needed it.

Now if, Samsung/Hynix are hitting delivery dates, that's another story....

ramenmeal

· #6 · Dec 1, 2009

excuses.

Oupavoc

· #7 · Dec 1, 2009

yeah, this story does have some leverage. Just look at DDR2 and DDR3 prices. They gone up significantly :s

trueg50

· #8 · Dec 1, 2009

Quote:

"Apple should certainly be blamed for deteriorating the supply and demand cycle in the global NAND flash market," a senior industry official told The Korea Times, refusing to be named.

"Apple has asked Korean semiconductor makers to produce a certain amount of chips for its digital products, only to actually purchase a smaller volume eventually. The company doesn't make immediate purchases, but waits until chip prices to fall to the level the company has internally targeted."

I believe that is the part that is what they are doing wrong (supposedly at least).

sdla4ever

· #9 · Dec 1, 2009

Quote:

Originally Posted by justarealguy

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Yeah but anyone ordering more than they actually buy is a bit of a d-bag in my book.

? other companies should learn from this. I remember once did apple have shortage of its product. iPods a few years back were hard to find. Now you can always find them. If microsoft and Sony would do this there wouldnt be that horse crap wait for a new game system since they failed to make enough. Or ATI? there would be plenty of 5 series to go around.

Im sick of companies waiting till there supplies run to zero before carign to make more.

I understand xbox and sony both lost money on the systems at launch but what better way then to have tons so every person who wanted one got one?

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Drizzt5

· #10 · Dec 1, 2009

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Originally Posted by Oupavoc

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yeah, this story does have some leverage. Just look at DDR2 and DDR3 prices. They gone up significantly :s

DDR3 prices have gone down. DDR2 prices are twice of what they were.

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GSingh

· #11 · Dec 1, 2009

Samsung is #1, hynix is #3, who's #2?

Sabis

· #12 · Dec 1, 2009

I think apple is pretty #2 if ya ask me...

And not just for this. So much garbage they spew when without the iPod they'd have gone under long ago.

aeoo

· #13 · Dec 2, 2009

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Originally Posted by GSingh

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Samsung is #1, hynix is #3, who's #2?

Bono.

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DuckieHo

Discussion Starter · #14 · Dec 2, 2009

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Originally Posted by GSingh

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Samsung is #1, hynix is #3, who's #2?

Probably Toshiba.

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uberjon

· #15 · Dec 2, 2009

Weird that 'custom orders' on this large scale isn't a legally bound agreement?

If I was to go to apple. and order 15 custom Mac-Pros, then change my mind any only pay for 1 (after waiting for them to put it on the closeout page at 27% off) I would probably go to jail. or at least pay a serious restocking fee for them..

Why hasn't Samsung etc started forcing apple to sign a contract? Apple would be forced to play fair. or not sign the contract and get a big fat shipment of 0 NAND chips..

liberalelephant

· #16 · Dec 2, 2009

I hate Apple products, I mean I REALLY HATE Apple products, but they are a good company, and this is BS. "Questionable business practices" my ass. Have you ever noticed all of these "complaints" against big business are usually because a company is doing something like keeping prices too LOW? Let me get out my economics 101 book for a second....Ok yes low prices are good for the consumer. Just what I thought.

Coma

· #17 · Dec 2, 2009

No, I think they're keeping it low for themselves. They only buy flash when it's at the price that's right for them, but Apple's stuff don't exactly drop in price because of this. They're just looking to extend the profit margin by doing this. And in the process, they're screwing over flash chip manufacturers. I'd say that's questionable.

liberalelephant

· #18 · Dec 2, 2009

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Originally Posted by Coma

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No, I think they're keeping it low for themselves. They only buy flash when it's at the price that's right for them, but Apple's stuff don't exactly drop in price because of this. They're just looking to extend the profit margin by doing this. And in the process, they're screwing over flash chip manufacturers. I'd say that's questionable.

By purchasing more than they need, all they are doing is hedging at the current prices. Since production is higher, supply is higher, and thus prices lower. What in the hell is wrong with that? And if they are expanding their margins, so what? They are a business, not a charity. That's not a questionable practice, that is being responsible to your shareholders.

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DuckieHo

Discussion Starter · #19 · Dec 2, 2009

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Originally Posted by uberjon

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Why hasn't Samsung etc started forcing apple to sign a contract? Apple would be forced to play fair. or not sign the contract and get a big fat shipment of 0 NAND chips..

Samsung needs Apple more than Apple needs Samsung.

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uberjon

· #20 · Dec 2, 2009

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Originally Posted by DuckieHo

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Samsung needs Apple more than Apple needs Samsung.

Valid point. unfortunately.. If only Samsung could turn all of its high density NAND fabs into high performance ones, (like overnight) they could go 100% SSD instead of mp3/etc. Then apple would have to go to another company. rinse-repeat = apple gets PWNT.

In reality, now that I think of it.. Why hasn't Samsung created an ipod-killer mp3 player? After all, they already have LCD tech, NAND tech. mobile device tech (psp?) I would be surprised if Samsung couldn't win a price AND feature war vs the ipod..

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