Apple, Samsung may be probed by Korean FTC | iLounge News

News

Apple, Samsung may be probed by Korean FTC

Following complaints from Korean digital music player makers, Samsung and Apple could be facing an antitrust probe over NAND flash memory chip pricing. Samsung is said to have sold its flash chips to Apple for the iPod nano at below-market prices, crippling makers of iPod competitors who cannot now build comparable devices at the same price points.

“Speaking at a local radio talk show, FTC Chairman Kang Chul-kyu said questions about Samsung and Apple engaging in unfair trading could be investigated by the antitrust body,” reports Asia’s Yonhap News. “The issue of whether Samsung provided cheap flash memory chips for use in Apple’s latest MP3 music player was raised earlier this week during a parliamentary audit on the FTC. Rep. Kim Hyun-mi claimed that Samsung sold its NAND chips for US$54, or roughly 50 per cent of market prices.”

« Yahoo! launches podcast service

Altec Lansing wireless headset connects iPod mini, cell phone »

Related Stories

Comments

1

now someone is getting what they deserve..

Posted by iJay on October 10, 2005 at 3:41 AM (PDT)

2

This is stupid.  What would have prevented any other digital music player company to design a product and then cut this deal?  They didn’t think of it, of course!!  Apple made a huge committment and in my opinion, has every right to work it’s best deal with whoever can supply what they need. You have got to believe Samsung wanted the highest price possible and perhaps they are putting their energies and inventory on the newer chips—-and this was a good business decision for them.  Why do governments need to step in?

Posted by Debbie on October 10, 2005 at 6:12 AM (PDT)

3

Is it just me, but where’s the crime? Bulk pricing is somethign that companies not only engage in with each other, but with consumers as well, all the time. If you buy a certain amount of something, you get price breaks. The hit in profit ratio is off set by the vast in crease in actual profit. Hell, companies sometimes sell at bulk rates that put them at a loss, just to get a foothold in some market. It is not horribly fair, since no one can buy as much flash as Apple, but where’s the crime?

Posted by Zachariah Delventhal on October 10, 2005 at 6:30 AM (PDT)

4

I’ll tell you what the “crime” is. If your acts have unintended consequences, they are still your acts. By buying the chips from Samsung at low prices, Apple effectively put other memory and mp3 player makers in a very tight position. Whether this act can be considered “anti-competitive” would be up to the courts. All of you now asking why the gov’t needs to intervene need to look back at Microsoft’s behavior during the 90’s. Consider the case of how some big airlines used to price their fares low to drive smaller competitors out of competition on certain routes. Was there really no crime committed?

Posted by Dave on October 10, 2005 at 7:06 AM (PDT)

5

While I do agree with your argument Dave, it’s still true that this “antitrust probe” could only take in a country like Korea.

If it worked that way in this country, Wal-Mart would have been tied up in the courts a long time ago.  Talk about predatory business practices!!!  Wal-Mart make Microsoft look like pussycats!

Posted by IDSmoker on October 10, 2005 at 7:21 AM (PDT)

6

IDSmoker, Wal-Mart has engaged in many, many “questionable” practices (as you have alluded to in your post).

Anyway, I don’t know all the facts about the Korean market, but it seems that Samsung did something very out of the ordinary. It’s now up to the courts there to decide whether their deal with Apple was wrong for the Korean market.

Posted by Dave on October 10, 2005 at 9:18 AM (PDT)

7

Well its samsung selling its own products. It would be different if they sold other companies products it would be wrong but since it’s samsungs own products they should be able to sell it at what every price they want to. Also creative or iriver would have done the same thing apple did if they were offered great prices on nand chips

Posted by Macromedia on October 10, 2005 at 12:29 PM (PDT)

8

The Korean government, or any other government for that matter, can do as it sees fit to protect whatever interests IT sees as important. And from what I see, they have a legitimate concern.

Samsung might’ve swung a sweet deal for Apple, but the implications are that anyone else wanting to buy flash memory wants the SAME sort of pricing when they buy from one of Samsung’s competitors. If Samsung is currently undercutting pricing because they figure that in the long haul they’ll make it back on sheer volume of sales, then it DOES adversely impact everyone else who doesn’t have a big suitor like Apple to buy up anything and everything that can be pushed off the assembly line. Potentially putting competitors out of business (or at least in the red) because they can’t sell product at Apple-prices may not have been Apple’s intent when the worked the deal with Samsung, but the effect is still there.

By investigating this, the Koreans are interested in protecting the health and integrity of the memory INDUSTRY, and not just the interest on ONE company, namely Samsung. Makes perfect sense to me.

Posted by flatline response on October 10, 2005 at 12:38 PM (PDT)

9

yeah… but you see what is wrong with this suit, don’t you? if the FTC wins we won’t be getting greater capacity nanos at great prices… will we? so because of this, it’s still us, the consumers, who are hurt. Not the big companies. As usual we have to bend over everytime a corporate big shot gets his panties in a twist over some other companies great deals. boo-hoo for the poor little millionaire

Posted by Just me on October 10, 2005 at 1:24 PM (PDT)

10

Just me, simply because an action is good for certain consumers doesn’t mean that it should be allowed to happen. I gave the example earlier of how some big airlines used predatory pricing to run their competitors out of business. In the short term, it was great for consumers who benefitted from the cheaper fares. What do you think happened once the smaller airlines went belly up? Do you really think the fares stayed low?

Posted by Dave on October 10, 2005 at 1:38 PM (PDT)

11

I have a Nano and it is good but i dont want Apple to be allowed to destroy other companies by having there whole range as loss leaders, the Nano is Sooooo much cheaper than other 2gb/4gb flash players, you got to look at the bigger picture , supermarkets are doing it , there are no grocers in my city! I dont want to buy my clothes in Tescos and i dont want Apple to be the only MP3 manufacturer either.

Posted by mark on October 10, 2005 at 5:01 PM (PDT)

12

Just me,

I’m sure the Koreans aren’t looking out for your OR my interests, that’s for certain. I suspect that they’re more keenly aware of the untold thousands of jobs that could be impacted as a result of companies cutting back or going away altogether because they can’t compete with a megalith like Samsung, especially since they have a major client like Apple on the hook for most of their product capacity.

Given the economic implications throughout the flash mem industry (heavily Korean, btw), something tells me that keeping foreign (to them) consumers fiscally happy isn’t highest on their ‘DO IT’ list.

Posted by flatline response on October 10, 2005 at 5:21 PM (PDT)

13

Mark: if you don’t want Apple to destroy the competition, then why the devil did you buy the product?  Buy yourself a more expensive, bulky, and inferior product than the nano and send Apple a message!  Hit ‘em where it hurts, man!

Posted by DIF on October 10, 2005 at 5:31 PM (PDT)

14

Thousands of jobs?  Ha, more like the hundreds of thousands dollars some other competitors greased the wheels of democracy with.
Flatline response comes in with typical looney commie bull.  Especially considering the fact that Apple is using Toshiba RAM in the 2GB units.
http://media.arstechnica.com/reviews/hardware/nano.media/dissection_closeup_of_flash_chips.jpg

Posted by Haha on October 10, 2005 at 7:08 PM (PDT)

15

to haha… exactly

Posted by Just me on October 10, 2005 at 11:26 PM (PDT)

16

Haha,

Why stop at hundreds of thousands if bribery is your thang? Besides, PROVE IT.

And WTF is so pinko about protectionism?  Capitalists do it better than anyone else, and S. Korea is about as capitalistic as they come. Any fool should be able to figure out that if only one company stands to benefit off the misery of others, then there will be a price to pay for allowing that to happen.  Since the Koreans are heavily vested in the computer memory industry, it certainly doesn’t bode well if Samsung ends up being at the top of the heap because of their Apple deal, regardless of Toshiba’s (a Japanese company) involvement.

You really SHOULD try to comprehend things before you fly off the handle with your moronic simpleton responses.

Posted by flatline response on October 11, 2005 at 3:26 PM (PDT)

17

Just me,

Yer just livin’ for cheap iPods…LOL

Posted by flatline response on October 11, 2005 at 3:30 PM (PDT)

If you have a comment, news tip, advertising inquiry, or coverage request, a question about iPods/iPhones/iPad or accessories, or if you sell or market iPod/iPhone/iPad products or services, read iLounge's Comments + Questions policies before posting, and fully identify yourself if you do. We will delete comments containing advertising, astroturfing, trolling, personal attacks, offensive language, or other objectionable content, then ban and/or publicly identify violators.

Commenting is not available in this section entry.
Sign up for the iLounge Weekly Newsletter

Email:

Recent News

Recent Reviews

Recent Articles

Sign up for the iLounge Weekly Newsletter

Email:

iLounge is an independent resource for all things iPod, iPhone, iPad, and beyond.
iPod, iPhone, iPad, iTunes, Apple TV, Mac, and the Apple logo are trademarks of Apple Inc.
iLounge is © 2001 - 2014 iLounge, Inc. All Rights Reserved. Terms of Use | Privacy Policy