Is Apple manipulating NAND flash memory prices?

By Justin Mann on December 1, 2009, 3:30 PM
The cost of NAND flash memory chips present in several Apple devices may have been deflated, according to a report from the Korea Times this week. Unnamed sources claim Apple's purchasing strategies are "questionable", harming the companies who make the parts.

Apple reportedly requests that large amounts of NAND memory be produced, and then places a smaller-than-expected order, creating an artificial supply excess. Apple then waits for the resulting price drops, only purchasing afterward. Manufacturers Samsung and Hynix did not comment on the situation, nor did Apple.

One industry analyst told CNET that changes in ordering is common on a small scale and does not cause problems. Contracts protect companies during large orders. Apple's decisions do affect the market though, with estimates of 20 to 30% of NAND memory destined for iPhones or iPods. If the accusations are true, it could lead to trouble for Apple.

User Comments: 24

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Kibaruk Kibaruk, TechSpot Paladin, said:

I only wish Apple gets in trouble, though of course the sellers won't talk because after all Apple is one of the big buyers.

Roasted Apple anyone?

TomSEA TomSEA, TechSpot Chancellor, said:

That's a serious accusation. Almost like trying to corner the gold market. Be interesting to see how this all pans out.

vangrat said:

Well as sneaky as this is, I find this pretty funny. In the end Apple owns this particular market at the moment, as soon as other large organisations step up to the NAND plate this wont be a problem anymore.

klepto12 klepto12, TechSpot Paladin, said:

i hope apple bites the bullet on this one. Im tiered of big companies running over the little guys its high time we do something about it. Apple doesnt really care about the customer i mean they always blame the customer everytime something goes wrong with there products.

Timonius Timonius said:

Hmmm...well if Apple has to pay a significant contract penalty then I don't see why they can't do this. Manufacturers will probably wise up to it anyway, and if it really hurts the manufacturer then we'll probably hear about lawsuits.

lfg18 said:

I agree with Klepto, Apple products are overpriced, and whenever they fail they accuse the costumer, one of my friends got a problem with his macbook just 1 month after he bought it, and when he took it to costumer service they refused to help him saying that it was his fault, he had to go two more times for them to take it. It would be good to see that Apple loses this one

9Nails, TechSpot Paladin, said:

Apple has a cash pile large enough to build another planet. I hope they are made to correct any mistakes that this has caused in the market. If they indeed did what the article is describing.

KG363 KG363 said:

Apple is becoming such an evil company. under-paid workers, lawsuits left and right, and now this

timljh said:

Apple already having enormous amount of profit and still wants to manipulate the pricing, how much more they want to get? Greed is really the worst attribute for human nature....

klepto12 klepto12, TechSpot Paladin, said:

Apple needs a new strategy called we take responsibility for our faulty products / actions that have cause people problems.

Puiu Puiu said:

Is it time for others to sue Apple now? Apple just got a few bucks from others and they will have to give it away now. ^_^ I like how the world works, don't you?

freedomthinker said:

Apple is seriously hooked on money ;D

kaonis92 said:

Apple is trying to manipulate the whole economy, let's not forget how it handled the situations of the exploding and overheating iPod's and other isues that it had. Apple deserves many sues, if it was a European company it would have paid millions to the EU for it's "questionable" marketing tactics...

LightHeart said:

Steve Jobs (Apple) is a controll freak, now that can be good, as all their products have that "Apple feel" which is one of the reasons they are successful. The down side is when Apple trys to control things outside itself, like markets. Of course I'm sure every large company tries to use their leverage to get the best deals.

Fada said:

I thought thats how bussiness was conducted?

slh28 slh28, TechSpot Paladin, said:

Well I guess that would explain Appl?'s industry leading profit margins. But to be honest this doesn't strike me as that bad, in economics speak this is just bargaining power of buyers. When the other phone manufacturers get their act together and start making similar smartphones, this problem will just go away.

Of course I still hope Appl? loses, and people start to realise how stupidly overpriced their products are.

swilllx2p said:

I really hope apple gets sued for this if its true. That's not cool at all, and if you think about it by doing so apple could be costing people that work for these NAND flash makers to lose there jobs because of loss in profit. So already rich apple does this just to save a few bucks possibly causing people to lose there jobs which are hard enough to get these days. All with a big smile on there faces.

BlackIrish said:

kibaruk said:

I only wish Apple gets in trouble, though of course the sellers won't talk because after all Apple is one of the big buyers.

Roasted Apple anyone?

Agreed :p

Btw, I'm sure Nokia will be the one to sue, they don't have any problems doing that to Apple!

ET3D, TechSpot Paladin, said:

I agree with Timonius. I was surprised when I read this because I expected there's be something in the contracts.

AbsolutGaloot said:

Unsurprisingly, these shady tactics aren't reflected in the pricing of their products, which are overpriced as always.

Heretic said:

kg363 said:

Apple is becoming such an evil company. under-paid workers, lawsuits left and right, and now this

When was Apple ever a good company? They're a business like all the others. No different from Microsoft. No different from Intel or AMD. They all have shady practices we don't know about. I'm just glad that this was brought up. It's about time we started seeing some more honesty in businesses, and not just in the computing field.

fref said:

It's nice to see Apple instead of Microsoft having problems of its own this time...

SNGX1275 SNGX1275, TS Forces Special, said:

Seems to be a problem with the people Apple buys from not knowing how to write a business contract.

Xclusiveitalian Xclusiveitalian said:

I wouldn't be suprised bc apple is very known for selling stuff at an ridiculous price If this is true I hope Apple gets in trouble big time.

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