The Korea Times reports on growing complaints within the flash memory industry that Apple, which holds a dominant position due to its extensive use of flash in the iPhone and iPods, is using its increasing leverage to inappropriately manipulate the market to its advantage.
Apple's strategy reportedly involves requesting that memory manufacturers produce a certain amount of flash memory, but ultimately purchases a lesser amount than that requested. The reduction in purchase amount relative to industry projections based on Apple's supply requests creates an oversupply of the flash chips, driving prices down and allowing Apple to lock in its orders at a lower price as suppliers compete to unload their chips.
The report notes that there is little that leading flash memory manufacturers Samsung and Hynix, who provide the chips to Apple, can directly do for the moment to combat Apple's strategy. Apple's tactics, however, are likely to erode relationships with the third-party suppliers it relies on for its devices, suggesting that it may not be a viable long-term strategy and may be an attempt by Apple to boost its ability to offer price-competitive devices in the short-term ahead of continued expansion of offerings from other platforms such as Android.
Article Link: Apple Accused of Manipulating Flash Memory Prices
