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Apple Accused of Manipulating Flash Memory Prices
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Amazing how Apple can do no wrong to some here. All the excuses. In general all corporations are scum, that includes Apple.
Good point, if I were a Korean cell phone manufacturer I'm probably not happy Apple's iPhone is introducing more competition. This is a good way to build nationalist sentiment against Apple.
That's why I don't consider the claim in the Apple commercial about them being #1 in customer satisfaction not to be in anyway accurate, because Apple could rip so many of its customers off and they will still give them the highest ratings possible
Apple has had these contract provisions since the first newsworthy $500m cash deposit was paid to flash makers. $500m to each of three of them I believe.
They have seen this go full circle at least 5 seasons since. Are they just now realizing their supply contracts need some editing?
There seems to be a trade off between the low risk of large cash commitments, timely payment, steady customer on the one side, and actual deliveries, actual spot prices at the time of those deliveries on the other.
I have not seen the contracts, but we do know that Apple, while a large early adopter of flash on scale, is not the only buyer, just one of the big fish. They also tend to lean forward on die size and size capacity since they are using it for handtop computing, not low end consumer devices. That tends to dwell in the waters of uncertain supplies of newer technologies and time-sensitive shortages as production ramps up.
This discussion seems to actually be about the items on the margin and on the tail end of deliveries, which while an issue for each supplier and perhaps the market overall, does not seem to be an issue of great concern for a buyer, even a fairly large buyer.
A buyer is a price taker, not a price maker. This strategy seems to be successful at lowering the price at which they are compelled to take.
They as a large advance pay or advance commit buyer are a supply maker and taker. They are soft-investing in their suppliers.
As a supplier I would put a contract provision to guarantee a minimum average margin in exchange for a guaranteed supply and first access.
That might raise the tail a bit while not changing much of anything else.
Rocketman
They have seen this go full circle at least 5 seasons since. Are they just now realizing their supply contracts need some editing?
There seems to be a trade off between the low risk of large cash commitments, timely payment, steady customer on the one side, and actual deliveries, actual spot prices at the time of those deliveries on the other.
I have not seen the contracts, but we do know that Apple, while a large early adopter of flash on scale, is not the only buyer, just one of the big fish. They also tend to lean forward on die size and size capacity since they are using it for handtop computing, not low end consumer devices. That tends to dwell in the waters of uncertain supplies of newer technologies and time-sensitive shortages as production ramps up.
This discussion seems to actually be about the items on the margin and on the tail end of deliveries, which while an issue for each supplier and perhaps the market overall, does not seem to be an issue of great concern for a buyer, even a fairly large buyer.
A buyer is a price taker, not a price maker. This strategy seems to be successful at lowering the price at which they are compelled to take.
They as a large advance pay or advance commit buyer are a supply maker and taker. They are soft-investing in their suppliers.
As a supplier I would put a contract provision to guarantee a minimum average margin in exchange for a guaranteed supply and first access.
That might raise the tail a bit while not changing much of anything else.
Rocketman
Amazing how Apple is always in the wrong to some here. All the venom for a company that has less than 10% market share (and even less outside the US).
What a load of rubbish. What a baseless statement.
Oh, but I forgot these are the friendliest forums for apple bashers.
Apple isn't basically picking up all the NAND memory that they ordered, at that price negotiated, and thus they are complaining that they could have sold this for more profit to a third party if Apple could better optimize their actual need.
Imagine how quickly this lawsuit would disappear if Apple bought Micron and fabricated it's own NAND. I wonder how quickly the notion of that happening would soon have the filers changing their tune.
Imagine how quickly this lawsuit would disappear if Apple bought Micron and fabricated it's own NAND. I wonder how quickly the notion of that happening would soon have the filers changing their tune.
For what I understand of the article, the "growing complaints within the flash memory industry" could be very well not be coming from Apple suppliers, but from their competitors. And while the "industry officials" of the Korean "semiconductor industry" are on the surface blaming Apple I suspect they are in reality sending a message to Samsung Electronics and Hynix Semiconductor.
Simplified analogy which is useful here. Do note the lines before the one you quote specifically say this is what they are accused of doing. The analogy is for what they are accused of doing. Are they doing it ? I don't know, I don't think they are above doing it, that is the nature of a corporate beast.
If its clearly illegal a company may not do it, unless penalties are insignificant. On the other hand if something is immoral but legal a company is very likely to do it.
In the long run this will work it self out, either it goes nowhere or it goes into courts and makes some lawyers happy until they settle. Unless the governments get involved, than it becomes like the MS anti trust trials in the US and Europe.
***As a disclaimer my stance on apple is that I generally like and use their products, thing that they are far from perfect and I am allergic to blind fanboyism for either platform.
Apple dominates the market this much?
Putting aside any anti-competitive behavior for a moment -- does Apple really dominate the demand for flash memory this much? It seems to me that there are so many products now with flash memory (other media players, USB drives, SD cards and other flash storage, SSDs, photo frames, cell phones, GPS units, and so on) that Apple's purchases would be relatively small. Does anyone know how much demand in this market comes from Apple? 5%? 10%, 25%, 50%?
Putting aside any anti-competitive behavior for a moment -- does Apple really dominate the demand for flash memory this much? It seems to me that there are so many products now with flash memory (other media players, USB drives, SD cards and other flash storage, SSDs, photo frames, cell phones, GPS units, and so on) that Apple's purchases would be relatively small. Does anyone know how much demand in this market comes from Apple? 5%? 10%, 25%, 50%?
Are you saying they are or aren't? The accusation is that they are, but given that it's anonymous, it could be anything, maybe even a bizarre negotiation tactic, one that would likely backfire.
Filers, as in lawsuit? The story was about complaints, I didn't see any mention of lawsuits in the MR story or in the story they linked.
This is what I was thinking...it seems more likely that they are trying to whine to the public, so they can get more from the cash cow. Didn't Apple just get blamed for buying all the flash memory up, so no one else could get the amount they needed???
That's real high-minded of you... that is as long as you are the one defining (and getting) what you (think you) "need"
Is it just a coincidence that these "enemies" also happen to be "competitors"?
Just Microsoft. The rest in that list are alienated potential partners.
He forgot to mention Adobe, too.
Yeah sure, and of course you not going to the point of the article which is nonsense.
I see you are registered here from 2006, shame really because during that time the geniuses in these forums have banned a multitude of genuine apple tec fans, only to let people like yourself make pointless comments on people being more lenient to apple in an apple fans forum.
Wow, what an important point you made.
Seems like a very legit and accurate point to me, why did you get so defensive? Think about all the Microsoft bashing that would have gone on had this story been about Microsoft. I'm sure the truth of something so meaningless hurts, but it shouldn't.
Microsoft has been found GUILTY by both US and European courts for anti-competitive practices.
Apple won its market share without using those illegal means.
If they have a case, say breach of contract, then the court can deal with it, and provide damages. Otherwise something like this is just mis-information spread by a jealous competitor / shill.