Apple and Samsung face potential antitrust probe by Korean FTC over NAND flash pricing

According to a report by Yonhap News, an antitrust probe may be conducted into allegations that Samsung Electronics Co. sold its NAND flash memory chips to Apple Computer Inc. at below-market prices.

“Speaking at a local radio talk show, Fair Trade Commission (FTC) Chairman Kang Chul-kyu said questions about Samsung and Apple engaging in unfair trading could be investigated by the antitrust body,” Yonhap News reports.

Full article here.

“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,” Ina Fried reports for CNET.

Full article here.

Related articles:
NAND flash prices rise ahead of Apple’s “One more thing…” event – October 07, 2005
Disgruntled iPod also-rans accuse Samsung of ‘damage’ by selling Apple cheap NAND flash memory – September 29, 2005
Apple’s iPod nano forces price cuts on flash-based MP3 players in Taiwan – September 15, 2005
Apple’s music competition having tough time and the iPod nano won’t help them – September 14, 2005
Piper Jaffray: Apple seeing high demand for iPod nano – September 14, 2005
Apple iPod nano 32GB possible in second half 2006? Samsung unveils new flash memory NAND chips – September 12, 2005
Also-ran MP3 player makers miffed by Apple’s impossibly low price for iPod nano – September 09, 2005
Apple introduces iPod nano – September 07, 2005
Apple stomps competitors in flash-based MP3 player market – September 02, 2005

26 Comments

  1. Let’s see, one company sells a mass quantity to another at a discount, so Apple’s competitors, which also happens to be the supplier, cries foul.

    It’s not Apple’s fault that the competition doesn’t have the voulme of sales to warrant a steep discount…

    Well, I guess actually it IS their fault LOL

  2. South Korean FTC under immense pressure from rival music player makers to do this, hence the announcement that there “may” be an investigation. Can’t see it happening, and even if there is one, I don’t imagine they could show the deal is below cost, but they have to make all the right noises to their own domestic producers.

  3. Samsung and Apple will pull a page from the parody sketch of Dave Chappelle and plead “the fiz-ith”

    (not sure if they actually have a fifth amendment right as we do here in the US, over there in Korea… to lazy to look it up for an easy joke too)

  4. Korean and Fair Trade don’t seem to go together. I remember reading over the years that domestic companies have the advantagee over foreign companies. Or was that Japan? I haven’t read the details of the complaint, but as long as the deal wasn’t exclusive, then I can’t see any grounds for any action.

  5. Given Korean producers propensity to sell offshore at below cost (“dumping”), the Korean Government is going to have a hard time with this one. I expect a drawn out investigation with nothing to report in about 9 months. In the meantime, producers (including Samsung) of NAND memory will have ramped up to satisfy demand. Overall pricing will drop and everybody will be happy, excepting of course, Creative, Sony, Dell et al.

  6. Samsung has made its position clear on this: the Nano flash memory is a new type that is cheaper than those used by the WMA-player producers. Since Apple bought a huge percentage of these types of flash memory they got a big discount. If South Korean companies want to compete with Apple and get bigger discounts for their music player components then maybe they should stop hopping for the WMA-compatible market to mature. Whatever happened to AAC support from these would-be Apple competitors?

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