Apple Affected by LCD Price Fixing by LG, Sharp, Chunghwa

Discussion in ' News Discussion' started by MacRumors, Nov 12, 2008.

  1. MacRumors macrumors bot


    Apr 12, 2001

    CNet reports that LG Display, Sharp, and Chunghwa Picture Tubes pled guilty to criminal charges for LCD price-fixing and agreed to pay $585 million in fines.
    The three LCD companies are reported to have held meetings about setting prices on LCD displays and agreed to charge predetermined prices to customers. Apple, Dell and Motorola were among the companies affected by this illegal price-fixing.

    Based on the article, Apple was only affected between September 2005 and December 2006 when the company used Sharp's LCDs for the iPod's screen.

    Article Link: Apple Affected by LCD Price Fixing by LG, Sharp, Chunghwa
  2. Mr Maui macrumors 65816

    Mr Maui

    Jul 19, 2002
    Maybe Sharp will offer discounts on a new Macbook / Mackbook Pro to those they helped rip off. :D

    OK, it's a dream, but ...
  3. GoCubsGo macrumors Nehalem


    Feb 19, 2005
    Why? Apple still made a premium on the panels without a doubt. Overall, they make a premium on every computer. As far as Apple is concerned, it probably hurt them more because I seriously doubt they would have opted to drop prices even if the panels were less expensive.
  4. SFStateStudent macrumors 604


    Aug 28, 2007
    San Francisco California, USA
    So, LG, Chunghwa and Sharp pay to the big Kitty, and then we get scraps, right? $5 of free iTunes downloads or a replacement iPod for the overpriced one that I gave to my brother. Pretty certain "we won't see JACK"...:eek:
  5. hiptobesquare macrumors regular


    Apr 20, 2003
    This is good for competition.

    Without the fixed high price, EVERYONE who produces LCDs will get downward pressure. The same competitive downward pressure that tries to pull the prices of consumer goods lower, to chase more scarce demand right now. Funny how the free market works when allowed to, and not hindered by illegal private, or regulatory government price fixing forces. This market will likely respond pretty quickly, due to being relatively un-regulated by civil regulations. Fraud prosecution, as what happened here, is the proper way to handle these situations. Although the fines that the LCD companies have to pay merely go to a bloated government, not to some other good use.

    As these companies start having to compete with each other, they will undercut prices, and add more features. This will bring the whole LCD market to that point, of either adding value, cutting price, or both.

    Just in time for the rumored dive in prices for LCD HD televisions around black friday, and through the christmas season, where this sort of tech goods were rumored months ago to take a heavy price dive, in light of the economy, but also the digital change-over in February.
  6. Shasterball macrumors 6502a


    Oct 19, 2007
    Wow, this is pretty big. Kind of hard for electronics producers to take a hit like that during these economic times.
  7. guzhogi macrumors 68030


    Aug 31, 2003
    Wherever my feet take me…
    Agreed, as I said before, I find that Apple is more interested in getting high margins rather getting high volume of sales. I've heard rumors (correct me if I'm wrong) that Apple doesn't have anything less than a 28% margin on its products. I'm not sure if that's 28% more than just the bill of materials or what (I'm no businessman). I'll admit, I'd understand putting jacking up the price to make up for labor/advertising/R&D costs, plus a small profit. But after awhile, I've got to ask, how much profit do these companies really need? To me, there's a difference between a fair profit, & too much profit. Where that lays, varies.

    I'd like to know by how much they jacked up the price. I wonder what the cut off point is between a "fair profit" and criminal price-fixing.
  8. sterlingindigo macrumors 6502


    Dec 7, 2007
    East Lansing
  9. DipDog3 macrumors 65816


    Sep 20, 2002
    Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 2_1 like Mac OS X; en-us) AppleWebKit/525.18.1 (KHTML, like Gecko) Version/3.1.1 Mobile/5F136 Safari/525.20)

    maybe that LCD tv will drop in price now.
  10. twoodcc macrumors P6


    Feb 3, 2005
    Right side of wrong
    i'm just glad that they were caught, so this doesn't happen in the future. maybe we'll see cheaper displays soon?
  11. miiles macrumors regular

    Aug 28, 2008
    Wow, I wonder whats next for the LCD market...
  12. howie78 macrumors newbie

    Sep 10, 2008

    Umm..not from apple.
  13. broncopde macrumors 6502

    May 12, 2007
    Conway, AR
    It seems that something like this only affects Apple's profits on those products during that time, not the customers, because Apple was gonna charge the same round $X49 or $X99 price on the iPods.
  14. mkrishnan Moderator emeritus


    Jan 9, 2004
    Grand Rapids, MI, USA
    What shocks me most about this is that Dell was actually overpaying for LCDs they use in displays... meaning that it would now be possible for Dell to deliver displays at even cheaper prices than the absurdly cheap prices they had before. Wowsers.
  15. Michael CM1 macrumors 603

    Feb 4, 2008
    If you had been looking at prices of LCD televisions over the past few years, this isn't shocking. I bought a 27" tube Toshiba television about 3 years ago for $250. Until very recently, a comparable-size LCD wasn't even close to that price. Probably about twice as much. Since most places don't seem to carry many, if any, tube televisions any more, you would think that the prices would've dropped a lot quicker. Maybe this is why.

    Sounds like a good reason to not buy any products from Sharp or LG for a while. I'll stick with my Samsung goodies.
  16. reallynotnick macrumors 6502a

    Oct 21, 2005
    Everything is fair profit as long as their are competitors, price fixing would be if all the competitors decided to be, well non competitive.

    Really it looks like this really doesn't matter for Apple as it was just for a short period of time on iPod screens, but I guess you multiply that by all the iPods and their is a nice chunk of money. Oh well 2006 is long gone now, and this is not going to help iPods now get any cheaper or anything. Glad they were caught.
  17. SolRayz macrumors 6502a


    Jul 5, 2007
    Ft. Lauderdale
    Price fixing I could care less about if they would atleast offer their customers quality goods. The MBP line has been afflicted by a flood of bad LCD panels, dead pixels, light leakage etc etc. My mid '07 MBP is on its fourth lcd replacement because of poor manufacturing and quality control.:rolleyes:
  18. air-ick macrumors member


    Jul 15, 2007
    Let the rebates begin!!

    Oh, wait - it's Apple. Nevermind.:D
  19. clyde2801 macrumors 601


    Mar 6, 2008
    In the land of no hills and red dirt.
    Great! Now Apple can make more money by sticking those crappy little screens in their Macbooks! I'm thrilled! :rolleyes:
  20. BlueRevolution macrumors 603


    Jul 26, 2004
    Montreal, QC
    So, instead of price fixing, they'll start trying to undercut one another. Unfortunately, I was pretty sure the entire post was filled with hidden sarcasm until I got to the end. What will happen is that they'll do their level best to drive their competitors out of business, succeed, then fix prices again with nobody in a position to complain.

    This is good for competition.
  21. ryanwarsaw macrumors 68000


    Apr 7, 2007
    It isn't like Apple will pass the savings on anyway. Even when SSD prices go down consumers don't see any difference from Apple.
  22. zombitronic macrumors 65816


    Feb 9, 2007
    This news comes out and their stocks are up in after hours. What gives?
  23. Xavier macrumors 68020

    Mar 23, 2006
  24. lewchenko macrumors regular

    Jun 8, 2004
    This did not hurt apple. They still made their 30%+ Margins on the screens.

    It did however hurt us... the people who were ripped off.

    However, for all we know .. had the screens been cheaper in the first place, apple may well have made 40%+ margins instead.

    So it sucks to be the customer no matter what.
  25. lewchenko macrumors regular

    Jun 8, 2004
    Situations like this typically occur because the level of the fine was deemed smaller than expected, and thus the company has been less hit (so in effect has more capital than the analysts thought they would).. so confidence in them goes up a little and their stocks go up.

    Stock prices often take into account events like this in advance. So their stock was probably depressed down somewhat awaiting the news. If the fine had been x2 as much, only then would the stocks have fallen as the fine would have been much more than expected.

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