Apple Accused of Manipulating Flash Memory Prices

[farmboy]

Oh really?
What you don't seem to understand is that we have no reliable information WHATSOEVER. The pizza analogy was incomplete and pointed out quite well that things could not be that easy. Well, easy enough for you I guess ...

I agree.

It seems there are a lot of people who (apparently) are not employed by a business, or they wouldn't be making the comments they make (Lilo777, KaneBaker, bdavis89, Rodimus Prime) ("All corporations are scum" Woof...no issues there). The pizza analogy is not even close to the the real world, or the pizza maker is an idiot. A couple of posts tried to correct it but were ignored.

We don't know the facts here. It may be jealousy, fud, negotiating in the press. Or it may be that Apple may have overestimated their needs as the economy deteriorated, and this is just a consequence of that and nothing more. No evil corporation, just screwed up forecasts, like most long-term planning in this economy, including those of the suppliers. You try to protect your company from oversupply/undersupply/pricing fluctuations, and sometimes it doesn't work out. That's why you have contracts that cover those events. These contracts are extensive and cover just such shortfalls, so these businesses are not without remedies.

Nor are the comments about how Wal-Mart works accurate--especially the Schwinn bicycle story, which seems to blame Wally World for Schwinn's total failure grasp industry design, material and marketing trends as long ago as the 1970's. They lost their way without any help from Wal-Mart at all. WM does drive hard bargains, but suppliers are making money at it, and they also walk away from WM all the time, because there are other places to sell their product.

And again, I like the gratuitous "fanboy" put-downs, which automatically designates any conflicting comments as somehow not as intellectually worthy as the poster's. It's reflective of the current political discourse, where "you're either with me or against me" (literally, in the recent Republican litmus test efforts).

 

[Rodimus Prime]

I agree.

It seems there are a lot of people who (apparently) are not employed by a business, or they wouldn't be making the comments they make (Lilo777, KaneBaker, bdavis89, Rodimus Prime) ("All corporations are scum" Woof...no issues there). The pizza analogy is not even close to the the real world, or the pizza maker is an idiot. A couple of posts tried to correct it but were ignored..

little insulting there. I think some of us know a lot more than most people here on how real world works. There are contracts yes i understand but many times there is also a level of trust between companies. If one company tells you that they plan on buying about X number of a product you expect them to do so because you trust them. When they turn around and back stab you you are left on the hook and they frie there trust.

I speak understanding how some of the big players run and what they can get away with. They can force things threw because you know if you can not meet there demands in production they will just go down the street to next guy leaving you on the hook so production has to be ramped up.

I can seem many people think contracts are everything and really have no understanding that it is not that way.

 

[JeffDM]

Nor are the comments about how Wal-Mart works accurate--especially the Schwinn bicycle story, which seems to blame Wally World for Schwinn's total failure grasp industry design, material and marketing trends as long ago as the 1970's.

Your timeline seems pretty far off. I have a Shwinn from the mid 80's that still looks and works fine, and I didn't baby it either.

WM does drive hard bargains, but suppliers are making money at it, and they also walk away from WM all the time, because there are other places to sell their product.

Leaving an avenue of sales like that can't be easy though, especially if Walmart accounts for a third of your sales.

 

[Rodimus Prime]

Your timeline seems pretty far off. I have a Shwinn from the mid 80's that still looks and works fine, and I didn't baby it either.

I think it is even farther off than that. Schwinn going to crap lines up pretty closely to starting to sell in walmart. In the late 90's a good friend of mine and my brother both got Schwinns from a bike shop and they were considered very good bikes back then.

 

[lPHONE]

I'm sorry, but OLED is a no go. Sure it has its advantages and whatnot, but the disadvantages are not worth it. OLED's have a very short life, and different colors die at different times, and more. Just no. OLED isn't the answer for now. It had to be improved or we'll need something else to come along.

Well... That's right up Steve's alley... Sell em some junk that breaks and force them to buy a new one at full price.

 

[charlituna]

key detail in this

is that it is the companies that are making these claims. with no hard cut evidence to back them up. they have presented NOTHING to show that Apple forced them to drop their prices. ordered and then renigged etc.

the truth may be that, in the interest of having enough product made, they asked for an estimate from Apple, added a safety and made to that number. but then Apple didn't need as much as they gave in their non binding estimate.

or the companies may have made up an estimate based on previous years and over guessed. either way they based their pricing on that higher number and went too low and were screwed. but perhaps instead of admitting the fault was their own, they want to make Apple look bad. and keep themselves looking good.

or maybe the source is some third company that isn't getting Apple's money because they were 'underbid' on the pricing and is trying to even the playing field

who knows.

 

[175170]

Well... That's right up Steve's alley... Sell em some junk that breaks and force them to buy a new one at full price.

That's why you buy AppleCare.

 

[kdarling]

The pizza analogy is not even close to the the real world, or the pizza maker is an idiot.

At UNC-CH back in the early '70s, I delivered pizzas. Mostly to college dorms.

Once in a while, we got the address wrong. Rather than come back to the shop with cold, unsold pizza, we were told to auction it for as much as we could get to anyone nearby. At first that policy worked well.

Then people figured out a scam: they would order with the address of the empty dorm room next to them, and wait until we were futilely knocking at that door. Then they'd pop their heads out, we'd offer a cheap sale, and they'd get their pizza for a song.

When it became apparent that this trick was becoming widespread, we began a new policy of only selling off the pizza to a different, random dorm floor. This quickly ended the scam.

If Apple really is talking companies into overproduction, and waiting for dropped prices to snap up a deal, then here's one pizza analogy that actually fits.

 

[lPHONE]

That's why you buy AppleCare.

Well... That's right up Steve's alley... Sell em some junk that breaks and force them to buy a new one at full price.

That's right up Steve's alley too... One way or another, you're gonna pay.

 

[FearNo1]

Aye, yet another example of apple being worse than M$...

 

[duck apple]

Originally Posted by Maserati7200
I'm sorry, but OLED is a no go. Sure it has its advantages and whatnot, but the disadvantages are not worth it. OLED's have a very short life, and different colors die at different times, and more. Just no. OLED isn't the answer for now. It had to be improved or we'll need something else to come along.

Didn't Apple just switch all their computers over to LED screens?

What people don't seem to understand is that Apple is playing dirty. KaneBaker put it perfectly.

You need some learning of the difference between OLED panel and LED-backlighted panel before post anything on this topic.

 

[steve123]

I agree.

We don't know the facts here. It may be jealousy, fud, negotiating in the press. Or it may be that Apple may have overestimated their needs as the economy deteriorated, and this is just a consequence of that and nothing more. No evil corporation, just screwed up forecasts, like most long-term planning in this economy, including those of the suppliers. You try to protect your company from oversupply/undersupply/pricing fluctuations, and sometimes it doesn't work out. That's why you have contracts that cover those events. These contracts are extensive and cover just such shortfalls, so these businesses are not without remedies.

I'll pipe in and point out that NAND Flash memory prices have TRIPLED in the last year. That suggests to me that memory makers are making bigger profits. So, if Apple is manipulating prices, their efforts appears to be doing so in the direction of higher prices. With memory nearly tripling in cost, it does make sense to me that Apple has a vested interest to see memory prices come down again. So, it does make sense that they are likely taking steps to see if they can influence prices down again. The reality is that what ever they are doing will take some time to have an impact. The comment from the memory maker might be revealing that the supply-demand picture is tilting in the direction of supply again which should allow memory prices to come down in the next 12 months.

 

[Ubuntu]

This is not Apple's problem. I want to pay less at a store. I either negotiate or buy from a different store with a lower price. Apple is doing the same. It's a free market.

If the Korean manufacturers don't like it, then stand up and say, "Apple, we don't want to sell to you."

If it was Microsoft, I highly doubt I would be seeing such comments. This strategy is in poor taste.

 

[charlituna]

If it was Microsoft, I highly doubt I would be seeing such comments. This strategy is in poor taste.

1.you won't ever see such comments from Microsoft because they are the flip side to the coin. Apple's lack of share gives them a legal right to tie hardware and software. Microsoft's abundance of share makes it illegal for them to do so.
since they can't pick the hardware they stay out of that game altogether.

2. the strategy is NOT in poor taste. It is sound business to stop going to someone whose prices are too high. Perhaps this is the kind of thing that will encourage companies to come back to the US and stop with the cheap labor and questionable employment practices in other countries. Or at the least encourage some of those companies to share a little of their profit with the workers and stop with the slave labor mentality.

Remember that the complaints were coming from a vested interest and that interest has yet to prove exactly what was going on. They want us to believe that Apple placed a huge order and then at the time of pay and pickup changed their minds but demanded the lower bulk price. When in fact Apple might have said they would probably need between X and Y and the companies assume it would be Y and set the price to that despite a solid order or pay. And it turned out Apple only needed X.

Also, what about Dell, HP etc. How many did they estimate, order, pickup. I wouldn't be shocked if all the companies were pulling the same games but only Apple is getting the press.

 

[Ubuntu]

1.you won't ever see such comments from Microsoft because they are the flip side to the coin. Apple's lack of share gives them a legal right to tie hardware and software. Microsoft's abundance of share makes it illegal for them to do so.
since they can't pick the hardware they stay out of that game altogether.

2. the strategy is NOT in poor taste. It is sound business to stop going to someone whose prices are too high. Perhaps this is the kind of thing that will encourage companies to come back to the US and stop with the cheap labor and questionable employment practices in other countries. Or at the least encourage some of those companies to share a little of their profit with the workers and stop with the slave labor mentality.

Remember that the complaints were coming from a vested interest and that interest has yet to prove exactly what was going on. They want us to believe that Apple placed a huge order and then at the time of pay and pickup changed their minds but demanded the lower bulk price. When in fact Apple might have said they would probably need between X and Y and the companies assume it would be Y and set the price to that despite a solid order or pay. And it turned out Apple only needed X.

Also, what about Dell, HP etc. How many did they estimate, order, pickup. I wouldn't be shocked if all the companies were pulling the same games but only Apple is getting the press.

I disagree. My comment was not suggesting a literal comparison, but rather that if Microsoft was manipulating something, somewhere, people would be all over it. I do love how you've managed to spin this round to make Apple look like the saviour here! I highly doubt they're passing on the savings to us, as Macs are still rather pricey.

 

[SactoGuy18]

Whoopee.

We're forgetting that thanks to the enormous sales of the iPod shuffle, iPod nano, iPod touch, and the iPhone, Apple consumes so much flash memory that they could dictate the terms that flash memory manufacturers could price their memory.