Korean flash-memory manufacturers are grumbling that Apple is gaming the NAND market. An article in Sunday's The Korea Times reports that the kvetching centers around allegations that Apple is depressing flash prices by ordering large amounts of NAND chips from Korean manufacturers, but purchasing only smaller amounts - and then …
So Apple order say, 1,000,000 units at £50 so 1,000,000 units are made ready, Apple then say "well, we don't want 1,000,000 anymore, just 100,000 please" so the company now has surplus stock of 900,000 units so the price is forced top drop (supply > demand) and Apple get their 100,000 units dirt cheap because they ordered 1m?
pot meet kettle
Oh yeah as if the Koreans and their government have never propped up money losing companies <cough Hynix> in order to dump memory on the market and bankrupt competitors <cough Infineon>. Ain't so fun huh when someone else destroys your margins by not playing fair eh Korea?
Pissing for pissing sake
Ah the Koreans (likely Hynix) are bitching cause they can't rob Apple blind. So just curious - what would happen to NAND prices if Apple cut iPod sales? (Crater no doubt.) Apple just has them by the baseballs.
BTW - You regularly state "Apple did not immediately respond to our request for comment. ®"
Did you really need to register the fact that Apple will not talk to El Reg???
So, Apple buys shed loads of _extra_ flash memory, and they are bitching because Apple have the cheek to shop around?
PS WTF is "kvetching " ?? If it isn't a typo, what language is it?
The economics don't seem to work?
Step 1: Order 1,000,000 chips. Thus there is a perceived shortage and prices go up.
Step 2: Buy 100,000 chips. The prices are going down as the expected rush doesn't appear yet, but the seller is still hoping it materialises --- so price is above the "natural" value before step 1?
It's not like there's been time to ramp up production and build a new production facility between steps 1 & 2.
It's worse than that
By first ordering, and creating a shortage, they're increasing costs for their competitors. Then, by only buying a small amount, they add a loss to their suppliers as well (by creating a huge surplus of chips).
Maybe it's time those suppliers told Apple exactly what to do with their order? I imagine Apple won't be doing this "forever" before their suppliers decide never again to do business with the Cupertino Rotten Fruit Distributor.
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