updated 07:55 am EST, Mon November 30, 2009
Apple NAND buying may hurt Samsung
Apple was accused on late Sunday by anonymous industry sources of 'bullying' NAND flash memory suppliers through its purchasing tactics. The company has allegedly, knowingly requested more memory from Korean firms Hynix and Samsung on a regular basis than it actually buys when the supply is ready. The iPhone and iPod maker is said by the Korea Times to regularly wait until the glut forces a price drop and then to buy only a smaller amount of stock that leaves excess inventory once again.
Since both Hynix and Samsung are heavily dependent on Apple for their memory businesses, they can't significantly challenge the practice and have had to watch as long-term contract prices for memory dropped 4 percent. The practice is considered "absurd" by one unnamed industry executive.
While doubts exist about how long the practice can last, it's believed Apple is racing to increase the capacity of its handheld devices as quickly as possible. Since launching the iPod nano in 2005, the American electronics giant has doubled the capacity of its flash-based devices on a yearly basis as soon as the technology has become available, culminating in this year's 32GB iPhone 3GS and 64GB iPod touch. Apple's product prices often remain consistent from year-to-year and consequently push flash producers to drop the prices of a given capacity where its rivals are often more conservative.
Neither Apple nor its suppliers have agreed to comment on the claims.