Has Apple manipulated the flash NAND market?
Charges have surfaced in Asia, specifically South Korea, that Apple is using its superior market position to unfairly influence the availability and thus the price of NAND flash memory.
The charge comes from a “memory industry official†who has apparently requested that he or she remain nameless. The charge was made in a private interview with a South Korean newspaper. The interview was subsequently printed without attribution, according to a CultOfMac article. At the heart of the charge is the officials statement that Apple “should certainly be blamed for deteriorating the supply and demand cycle in the global NAND flash market.â€
This is not the first time that this charge has been made. In all cases, the Cupertino manufacturer is said to have placed orders for very high quantities of flash NAND, used in a number of its products. Afterwards, Apple is said to not take delivery of all of the memory ordered, which results in excess inventory in the marketplace, ultimately causing lower prices, of which Apple then takes advantage. It is said that South Korean companies, such as Samsung and Hynix, are among the most severely affected by this practice.
Given Apple’s record high profits at a time when many chipmakers are being adversely affected by the global recession, the chipmakers are trying to strike back. A report released in October said flash memory supplies, which were already 1.3 percent below demand at that time, were expected to reach as much as 3.3 percent under demand for the critical holiday period. It is believed that the reason was that chipmakers are favoring Apple and its multitude of devices which use flash NAND, especially the iPod and iPhone.
It is difficult to tell if these complaints are simply the result of sour grapes stemming from normal NAND market fluctuations, or if there is some basis in fact that the price fluctuations are being caused by Apple’s business practices. As more and more complaints surface, more light will illuminate the issue, and will probably result in more information as to exact causes. If it appears Apple has been forcing the market to adhere to its price desires, there will almost certainly be lawsuits and investigations by regulatory agencies, guaranteeing that even more information will be made public.
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