News
Samsung forced to cut flash memory prices
Samsung has been forced to cut NAND flash memory pricing because of “weaker-than-expected” iPod sales and competition from SanDisk, according to a report. “With weaker-than-expected iPod nano sales this year, Samsung has been trying to maintain control over its inventory levels by dumping excess stock with memory module makers,” reports Digitimes. “Samsung is pushing its products hardest with companies that it has close ties with, but other firms are receiving attractive quotes from the memory maker as well.”
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1
So, does this mean a discount, or more profit for Apple?
Posted by Dan on March 20, 2006 at 3:47 PM (PDT)
2
Neither, Apple never discount unless an item is to be discontinued. Also, Apple already purchased their flash. It means more competition at lower (but not neccasarily below the nano) prices
Posted by silver_haze20 on March 20, 2006 at 5:29 PM (PDT)
3
Also, Apple already purchased their flash.
You might be correct that Apple’s flashmem price is preset by their contract with Samsung, but there’s no real way of knowing whether or not there’s provisions for reducing that contract price if the market price falls below a certain level. Actually, it would’ve been idiotic for Apple to have not put such a clause in their agreement with Samsung, since we all know what happens with tech pricing over time. Current flash memory pricing certainly bears this concept out.
I seem to remember saying something about Samsung’s shortsightedness (OW...my arm really hurts from being so self-congratulatory and all that back-patting...). Indeed I wonder how Samsung’s flashmem side is really doing these days, what with all the punches that upstart SanDisk have been tossing their way of late. First all the flack they took from their own government on that then-cheapo Apple pricing, now the broadsides that their competition is lobbing...tsk, Samsung.
I’d guess they’re really regretting that Apple deal they signed last year right about now. That deal made it look like Samsung passed up on a LOT of potential profit early on in the hopes of making it up later when production costs would finally lower and make that contract price profitable. Now that they’re whining about the ‘lack of iPod sales(?!?)’ at a time that the players have been moving out the door at breakneck pace, and now discounting the supplier price of flashmem to everyone in what looks like an flatout attempt just to move product. Yeah, I’d say the Apple deal really sucked for them. Guess their execs and accountants just had a brain fart and thought Apple was going to sell billions or trillions of iPods rather than the millions reality bore it out to be.
Yeah, sure...I really can see how someone could transpose a ‘b’ or ‘t’ for a ‘m’ when translating from English to Korean...not. They can’t blame this one on Apple.
Posted by flatline response on March 23, 2006 at 3:38 AM (PDT)