Monday, November 30, 2009

Is Apple A Big Flash Memory Bully? Yes, and No

Gone are the days when people would point at Microsoft as the big bully. Now they also point to Intel and Apple, and this story concerns Apple. It's well-known that Apple orders tons of flash RAM whenever they are planning a new device launch, and that influence on the market means that Apple can manipulate it.

At least, that's what semiconductor manufacturers are claiming, stating that Apple is manipulating flash memory prices through its "questionable" purchasing strategies. However, because it uses so much flash RAM in its iPod and iPhone devices, there's not much they can do about it, say vendors like Hynix and Samsung. A senior industry official told The Korea Times:
"Apple should certainly be blamed for deteriorating the supply and demand cycle in the global NAND flash market.

"Apple has asked Korean semiconductor makers to produce a certain amount of chips for its digital products, only to actually purchase a smaller volume eventually. The company doesn't make immediate purchases, but waits until chip prices to fall to the level the company has internally targeted."
Now, it's all interesting, but at least it's not bullying on the level of Intel, where kickbacks and "rebates," or the threat of a held-back rebate, forced vendors to buy Intel instead of AMD. It's also hard to understand the "bite-the-hand" that feeds you approach to this complaint, as while Apple doesn't singlehandedly own the flash RAM market, it owns a huge piece of it, and that's capitalism at its best.

In reality, this sounds more like a bunch of OEMs unhappy with Apple's control over a huge portion of the flash RAM market. Of course, Apple is the big bully in the flash RAM world, but that's just the way it is. Perhaps they need to team up with Microsoft and see if they can get the Zune more market share. Nah.
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