“First, there were allegations that Apple and a host of other tech companies were colluding to prevent competitors from poaching each others workforce, so-called poaching of the payroll. That spawned a Justice Department investigation,” Jim Goldman reports for CNBC. “Then, it was board of directors overlap, with Google CEO Eric Schmidt sitting on both Apple’s board and his own company’s. That spawned a Federal Trade Commission investigation.”
“Then, Apple’s decision to delay — or deny, depending upon whom you talk to — the Google Voice app from its popular App Store spawned a Federal Communications Commission investigation,” Goldman reports. “Now, we get word that US Trade Office officials are involved in some kind of investigation connected to flash memory, Apple, Sony, Samsung, Dell and others.”
Goldman writes, “Apple’s near total control of online digital media, movies, music, entertainment, the App Store’s wild success, the enormous momentum surrounding iPhone, is grabbing headlines and grabbing the attention of regulators. But just a healthy reminder: ‘momentum’ is not the same thing as ‘monopoly.’ If it seems like Apple owns the App Store market it’s quite simply because Apple owns the App Store market. Literally and figuratively. Same goes for the iTunes/iPod/iPhone ecosystem. Apple created the market, the marketplace, the technology, and therefore gets to make the rules. If consumers don’t like it, they can go elsewhere and start their own services with their own technology.”
Read more in the full article – recommended – here.
From I understand Apple bought the majority of flash memory, made an upfront payment and was able to obtain a very cheap price as a result.
That is what is called “economic of scale”. It is a basic business manta that has been applied even since the first Ford Model T rolled off the production line.
The only thing I agree with is that the Feds are checking into Apple before they get as big as M$. Hopefully they want to set ground rules for these emerging markets before it is too late.
It was an honest mistake. Someone in the US Trade commission thought Apple employees were “flashing” Samsung and Toshiba to get exclusive deals.
Kinda like that sex for oil scandal only less slippery.
http://www.cbsnews.com/stories/2008/09/10/national/main4436263.shtml
Is a flash memory probe like a cross between a flash flood and an anal probe? The mental image is painful. Ouch!
Looks like Steve Jobs might become a Republican after seeing what happens when liberals take over the government and you actually have a formidable business.
http://www.electronicsweekly.com/Articles/2009/08/25/46827/uks-btg-complains-samsung-apple-rim-infringe-flash-patents.htm
Hmmmm ….
And here I thought it was M$ paying off the feds.
Why are they wasting time with Apple. Right now you are FORCED to use Internet Explorer on Windows only on US Government sites. Corporate and some public sites. Thats right, these sites will not work properly and you get the sign right on the pages “MUST USE Internet Explorer 7 only”. Hows that for helping the monopoly grow.
Another government office and initiative under the leadership of that complete and utter dumbass Obama. What a moron, worse than Carter.
I hate to nitpick, but if you’re going to quote a basic economic principal, at least get it right. It is called “economies of scale” not “economic of scale”
Tell us how you REALLY feel.
Apple’s got cash so they buy in Bulk. Admitted in huge amounts but, isn’t that one of the keys to cutting the best deal with the suppliers. Sounds like Apple is being investigated for applying standard business principals and just common good sense.
We must crack down on these successful companies. They are not sharing the wealth with the others fairly. We can no longer tolerate a society where hard work, better ideas and better products allow some to be successful while the others are not. But in the mean time until we get these things worked out, thanks for the taxes. -B.H.O.
@X What a coward, at least post your name you big puss… That’s worse than being an alleged dumbass/moron! Grow up and get a pair, LOSER!
As the article states, details in the flash case are few, but it’s possible that the issue is that Apple (and others) may have placed orders for flash modules in excess of what they otherwise would’ve ordered, not for a volume discount, but rather to corner the market and squeeze out competition.
I’m not suggesting Apple did this. I have no idea. However, this is the type of anti-competitive activity that would bring an investigation to the flash customers as opposed to the flash makers.
And while the article says that a case against the customers is unusual, it’s not without precedent. Car companies did this with steel and parts to squeeze out small companies that had potential to grow.
And while Apple (and others) may not have intentionally done this, unintentionally, their large volume purchasing certainly had a significant impact on smaller competitors. There’s nothing wrong with that in of itself, it’s only a problem when there’s an intent to purchase in order to constrain supply to your competitors.
Do not forget that when Apple inc. paid for a joblot of Flash memory chips, the industry, specifically the computer industry did not know how to incorporate it into their products as they were still besotted with ever larger hard disc drives, by which I mean the ability for the PC sales person to claim that this pc has 500gb of memory or 250gb etc including Ram memory.
They also did not understand (that is me being sympathetic to them) I should say had no clue that Flash memory could be put to use i other products not just computers and iPods or iPod wannabe’s.
So when they finally like the rest of us found out that Flash memory could be used on the mobile phone platform, the damage had been done in terms of first out of the blocks gets all the kudos and soaks up the market like a whale scoffing krill and the rest of the wannabe’s get called exactly that…..wannabe’s or more politely “iPhone killers” even before they have been launched and proven to deserve the title.
So what is this investigation all about I hear you ask? it is about providing extra jobs to people who would otherwise be jobless in cash strapped economy, also, it provides exactly what I/we are doing…..validating the headline by blogging furiously about it.
Ps errors & omissions included in the last posting.
Buyers of Flash memory can do so at any time, all Apple inc. has to do is to request a part delivery to fullfil the iPhone or iTouch demand which results in a slight delay of delivery to the buyer. The buyer depending on the quantity they are ordering as in any wholesale business will acquire a larger discount depending on the volume ordered.
iPhone sale & iTouch sales have so far proven that Apple inc have not over ordered Flash memory or by any stretch of the imagination (apart from competitors of course) set to corner the flash market.
As I understand it, Flash memory manufacturers maybe few but at least there are a few, not one as in the case of M$ & similar companies that own the only product marketed directly to the consumer as well as the wholeseller who has no choice.
My understanding is Apple payed the memory makers a ton of money way ahead of time and said, “go make us some memory!”
If the memory makers didn’t make more memory for everyone else, is that Apple’s fault?
Ps Apple inc’s advance money enabled the price of Flash memory to drop almost at once for later buyers as the advance money paid for the production assembly and future wages of the staff required to supply said order. Enough from me now.
If Apple bought all this flash memory ahead of time (and paid all that money ahead of time) and their products DIDN’T sell very well . . . Apple would have been left holding the bag.
You take the risks, you reap the benefits – IF all goes well.
John … and anyone else
Yea, if these “probes” keep coming – Apple may need to hire a Staff Proctologist …
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R2 … how you know Steve’s not one already ? …
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BC
My question is:
Who’s filing the complaints with these agencies in the first place?
Therein lies the story….
Deus Ex-nica …
Now don’t go all Official Journalist on us
Asking Real Questions like that only leads to one thing …
Rational Thinking … and we all know how dangerous that can be
@ @DogGone
My bad. It was 7 AM pacific time when I wrote that. We all do typos every once in a while.
Reading more into the probe – as someone linked above – the issue is patent related and not necessarily anything to do with the recent monopoly issues. The original article is a bit misleading.