Korean FTC May Investigate Apple/Samsung 148
freaktheclown writes "Samsung may have sold Apple flash memory chips at below-market prices, possibly violating the country's competition laws. From the article: 'According to a report by Yonhap News, Korean Fair Trade Commission (FTC) Chairman Kang Chul-kyu said that his agency could look into allegations that Samsung sold the memory chips to Apple at below-market rates. Apple reportedly grabbed a significant share of Samsung's flash capacity in order to introduce its new iPod Nano. Analysts also speculate the computer maker got a significant discount from Samsung in order to hit the Nano's $199 and $249 prices.'" Adds a new layer to a previous story, eh?
Pretty iffy (Score:5, Insightful)
Bulk purchases? (Score:5, Insightful)
New layer? (Score:4, Insightful)
Also - WTF is "below-market prices"? I believe that does not mean that Samsung is gonna sell it at below the cost to produce, no?
Re:Bulk purchases? (Score:4, Insightful)
I get the feeling that this is simply due to all the other MP3 makers shouting "unfair" and putting pressure on the government to carry out this investigation. And this is basically due to sour grapes as every other company that makes MP3 players is wishing they were Apple or at least had as good products as Apple does.
Re:Not the First Anti-competiveness from Apple (Score:5, Insightful)
You got that right.
Those talking about Apple's superior engineering and aesthetics still have quite the point.
Re:Not the First Anti-competiveness from Apple (Score:5, Insightful)
Apple got Hitachi to sole-source the HDs it used in the iPod. Big woop. Not necessarily dirty. Others had their chances at a slice of the 1.8" drive, too.
And Apple agreed to buy a big-ass load of NAND chips for the Nano to very favorable terms. Again, big woop.
If you are selling a commodity product, and someone comes along and says, "Hey, I'll buy all of your production for the next 18 months," and you still make money on it, you tend to bite on it.
Since we don't know what pricing level the KTC is looking into, it could be that Apple just committed to a magnitude larger memory buy than other buyers had done up until that point. Instead of selling several lots of 1 million SKUs, maybe, at varying price points over time, Apple says, "Hey, we'll buy 10 million SKUs over the next year at $5.00/10000 (when "the market price" tends to be $5.5/1000, or whatever) with half of the total up-front, and the rest delivered monthly upon delivery...", which is guaranteed money for Samsung (and pissing off AMD, Intel, Xylinx et al).
Again, not a big deal.
Want to buy a couple of animals from a farmer, but it'll take a week or two? OK. But if someone comes along and offers to buy everything he has for sale a couple of days after you talk to him, too bad!
Re:Pretty iffy (Score:5, Insightful)
What's the problem? (Score:3, Insightful)
Re:Not the First Anti-competiveness from Apple (Score:2, Insightful)
Comment removed (Score:3, Insightful)
"below market prices" (Score:5, Insightful)
If selling below market prices is illegal, how do market prices ever fall?
Re:Not the First Anti-competiveness from Apple (Score:2, Insightful)
I do believe he's just making wry commentary on the likelihood of their positions swapping in ALL cases. And there's certainly something to be said for that, as an unchallengable market leader tends to stagnate while the up-and-coming try to compete on whatever grounds they can.
Dumping vs. "selling under market price" (Score:3, Insightful)
"Selling under market price" OTOH is what the free market is all about: if Samsung can produce more cheaply, they should be allowed to sell for less, too. It wouldn't be their fault if their competitors where too expensive.
The thing here is, these articles about Samsungs competitors' complaining have been going round almost since the launch of the Nano. And never did they contain anything about "dumping", only about "Samsung selling at too low prices for us". This sounds like they
a) sold their flash drives etc. at inflated prices and
b) are now asking for help to continue doing that.
If that's the case, I cannot find any sympathy for them.
There are good reasons for this (Score:2, Insightful)
Firms are required not to subsidise their products as allowing goods to be sold below cost gives the big industry players a chance to bankrupt their competitors: You know, like what Microsoft did to Netscape....
Economics 101 (Score:4, Insightful)
Doesn't the fact that a company was prepared to sell 10 million chips at that price make that price the "market price" for 10 million chips? How else do you define a market price except as what a seller and a buyer agree on?
Unless Steve Jobs used a focused Reality Distortion Field or blackmail to get the deal, I don't really see the problem. Unless (shock horror), CNet is misrepresenting the story again.
Re:Not the First Anti-competiveness from Apple (Score:5, Insightful)
Second of all, my point isn't that this was some awful thing that Apple did. This is how business is played. It's not nice and friendly, its down and dirty, and Apple plays the same game as everyone else.
If Microsoft had used their clout to buy up all of Toshibas drive to make a slim mp3 player that took the market by storm, and companies like Apple were uanble to get any 1.8 drives to make players with your collective outrage would know no bounds. You would bitch and moan to no end that Microsoft was not playing fair. While I fully expected my original post to be unfairly moderated down (my karma can take the hit), it surprises me that so many of you could be so hypocritical.
I don't take issue, really, with how Apple condudcts itself, simply with the ultra-unrealistic impression that many of you seem to have about it. Apple is not some peace-loving commune where flower children lovingly hand-craft gadgets for your enjoyment. It's a business and it's run just like every other business.
Everytime they're accused of breaking the rules (as businesses will often do), there's a torrent of people anxious to rush to Apple's defense to tell us why it was "totally ok" for Apple to cheat. It's not ok for ANYONE, no matter how sexy their latest toy may be, to cheat wether it's Microsoft, Apple, or anyone else.
Re:Pretty iffy (Score:2, Insightful)
This place is full of too many armchair econmists, armchair politicians, armchair etc...
Not aiming at you individually, but I do wish people would actually read the fucking article before talking about it.
Re:Pretty iffy (Score:3, Insightful)
Is this news? (Score:3, Insightful)
Korea's top antitrust regulator reportedly said on a local radio show that authorities there may look into whether Apple's purchase of flash memory from Samsung Electronics may have violated any of that country's competition laws.
According to a report by Yonhap News, Korean Fair Trade Commission (FTC) Chairman Kang Chul-kyu said that his agency could look into allegations that Samsung sold the memory chips to Apple at below-market rates.
Apple reportedly grabbed a significant share of Samsung's flash capacity in order to introduce its new iPod Nano. Analysts also speculate the computer maker got a significant discount from Samsung in order to hit the Nano's $199 and $249 prices.
An Apple representative did not immediately have a comment on the report.
Now, forgive me, but what is newsworthy about this? Not only is it heresy published on a blog, but it's not even saying anything definite.
I (and I'm not alone here) would hope that Apple got a damn good break on the price for buying the flash in the kinds of quantities that they will need to satisfy demand for the Nano.