News
Report: Apple manipulating NAND flash pricing
By Charles Starrett
Senior Editor, iLounge
Published: Monday, November 30, 2009
News Category: Apple
Apple is manipulating NAND flash memory pricing though “questionable” purchasing strategies, according to a new report. Citing multiple unnamed industry officials, The Korea Times reports that Apple is using the leveraging power provided by the popularity of the iPhone and flash-based iPods to order more chips from semiconductor makers than it actually needs. “Apple should certainly be blamed for deteriorating the supply and demand cycle in the global NAND flash market,” said an unnamed senior industry official. “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.” A separate unnamed official called Apple’s purchasing strategies “absurd,” adding, “Samsung and Hynix both provide chips to Apple and have less of an edge in deciding prices and volume. Apple’s strategy could hurt the industry’s health.” An earlier report from September indicated that Apple’s consumption of NAND flash chips, which are used in the iPhone and iPod nano, touch, and shuffle, was causing a severe shortage of the popular components.
Related Stories
- Motorola loses third patent case against Apple in Germany
- Apple airs new Siri-focused iPhone 4S ads
- German court rejects Apple bid to ban Galaxy 10.1N
- Apple asks European standards body to set Frand rules
- Key iPhone, iPod executive left Apple last year
- Apple eyeing Sam’s Club for store-within-a-store locations?
Comments
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.
Recent News
- iLounge Weekly coming early Monday, giveaway reminder
- iBackFlip launches Somersault case for iPad
- Motorola loses third patent case against Apple in Germany
- Apple rushing to pick demo apps for next iPad launch
- Apple airs new Siri-focused iPhone 4S ads
- Periscope Audio Lab releases SpaceSampler
- Evernote Hello improves contact entry features
- eMailGanizer Pro adds Universal Inbox, Smart Folders
- Scosche rolls out bassDock for iPad
- German court rejects Apple bid to ban Galaxy 10.1N
Recent Reviews
- Cygnett Apollo for iPhone 4/4S
- Case-Mate Pop! ID for iPhone 4/4S
- Case-Mate Pop! for iPhone 4/4S
- Case-Mate Pop! With Stand for iPhone 4/4S
- Solid Line Products RightShift 2 Removable Keyboard Case for iPad 2
- Spigen SGP Kuel F60Q Battery Pack
- Just Mobile Highway + Highway Pro for iPod, iPhone + iPad
- Speck CandyShell and CandyShell Satin for iPhone 4/4S
- Jensen JiPS-310i Docking Speaker for iPod, iPhone & iPad
- FrappeDesign Smart Sleeve for iPad 2
Recent Articles
- iOS Gems: Adventures of Tintin, Reckless Racing 2 + Scramble With Friends
- Ask iLounge 2-3-12
- Making The Case For - And Against - An Apple iTV Television
- Instant Expert: iTunes U for iPad, iPhone and iPod touch
- Instant Expert: Secrets & Features of iBooks 2.0
- iLounge’s 2012 CES Best of Show Awards: Honorable Mentions
- iLounge’s 2012 CES Best of Show Awards: iPod, iPhone, iPad + Mac
- iOS Gems: Bug Princess, Dora Hops Into Phonics, It’s A Small World, Sleepy Jack + X Is For X-Ray
- The Complete Guide to Managing iTunes Videos
- Editorial: As CES Grows, Will Microsoft’s Loss Be Apple’s Gain?


1
“Unnamed sources” claim Apple is buying “more than they need”
Hmmm. how do they know what Apple needs?
Haven’t the rumors and other info pointed to a tablet?
If so, said table isn’t going to be using hard drives for crying out loud.
Seems someone’s not happy with having to do business with a company based on the theories of “free market”
This is what we’re going to get with the “one world economy” certain politicians and others want.
No thanks.
If Apple are doing wrong - prove it.
Name names, and give facts. This is BS at this point.
*Note - this applies to the “story” not iLounge.
Posted by sb on November 30, 2009 at 5:04 PM (PDT)
2
@ sb: u r 100% right
Posted by dennis on November 30, 2009 at 8:48 PM (PDT)
3
Apple: “We want x number of functioning Chips at this price”
Chip Manufacturers: “Here you are: x number of Chips”
Apple: “Only half of these are functioning, the rest are defective.”
Chip Manufacturers: “Help! We’re being repressed!”
Posted by Dan Woods on November 30, 2009 at 10:18 PM (PDT)
4
Who knows whether this is true or not, but… Wow… blatant fanboy’ism… my god… Its frightening how people will follow a company through anything…
Posted by Gregory on December 1, 2009 at 5:08 PM (PDT)
5
@ Gregory,
Yeah, we should all stop using Apple products because of an unsubstantiated rumor.
You Windows fanboys are the real humor - especially when you come to sites that seem to have a higher % of Mac users.
I guess the big MS Store openings weren’t enough to keep your ADD from coming back…
Posted by sb on December 1, 2009 at 6:09 PM (PDT)
6
It’s not a question of fanboyism or anything else with the above quotes, it’s one of reading comprehension. Neither sb nor Dennis came remotely close to summing up what was claimed or provided anything close to a reasonable alternative.
The claim is that Apple is telling the manufacturers they would like to buy X units of memory. Once it’s actually ready for delivery they’re reneging, saying they were mistaken to order X, they only need X/2. This leaves the manufacturer with what amounts to a huge glut of chips which drives the cost down, once the price drops due the artifical glut *created* by Apple, Apple comes back and says they changed their mind, they’d like to buy the other X/2 units. This lets Apple buy their full allotment of units at substantially lower cost than they initially negotiated.
Now, is Apple actually doing this, I don’t know, but your two’s “explanations” were idiotic and fine examples of people who will go far out of your way to explain away something negative about one more amoral corporation with a great PR dept.
Posted by Code Monkey in Midstate New York on December 1, 2009 at 7:31 PM (PDT)
7
@ Code Monkey… I’m not sure if you’re referring to me or to sb, but I don’t recall providing any ‘explanations’ idiotic or not. My point isn’t that this did or did not happen (and I’m actually not an MS fanboy) it is that the majority of people here seem to dismiss it as easily as I am accepting it.
Posted by Gregory on December 1, 2009 at 7:42 PM (PDT)
8
OK, so what’s worse - accepting it NOT KNOWING the details or NOT?
As for Code Monkey - you’re kidding, right?
You’ve read the contracts?
You’ve read the complaint?
Not likely on either count.
You’re like the US Congress (part of it) pushing a health care bill none have read.
Comical.
Posted by sb on December 2, 2009 at 1:13 PM (PDT)
9
@ sb… I can’t disagree with you there; it’s just as ignorant to wholeheartedly accept it as truth as it is to dismiss it completely. I guess we won’t know the truth for a while, if ever. I simply felt that the first three comments were way too dismissive considering the gravity of the accusation.
However, I also think that Code Monkey made some valid points.
Posted by Gregory on December 2, 2009 at 6:15 PM (PDT)