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Prices Up For Manufacturers, Down For Consumers in Wake of Apple-Samsung Deal
Wednesday, September 28th, 2005 at 3:00 PM - by Brad Cook
While no one knows exactly how much of a discount Apple received from Samsung for the NAND flash memory chips used in the iPod nano, the fallout from that deal is well-known: Supplies have become severely constrained to the point that 200 minor MP3 player manufacturers in Asia have gone out of business because they can't get parts.
The New York Times' Damon Darlin published a report on the situation Thursday, citing comments from iSupppli Corp. analyst Nam Hyung Kim to back up such claims. Mr. Darlin notes that estimates for what Apple is paying for Samsung's flash memory range from US$85 to $120, which would be somewhere around a 30% discount.
Even though manufacturers face trouble getting supplies and have seen higher prices, consumers continue to enjoy watching the price of flash-using devices fall. With the iPod nano doubling as a file storage device, companies that sell flash storage drives have had to drop their prices to compete. As Gartner analyst Joe Unsworth told Mr. Darlin: "A 4GB flash drive isn't stylish and trendy, and you can't use it to play music."
And while the micro hard drives used in the iPod and iPod mini continue to be cheaper than flash drives with comparable storage space, Mr. Darlin notes that in 2006, 4GB flash memory chips will actually cost less than 4GB micro hard drives.
For more on the current trends in flash memory and the fight over which type of storage will make its way into cell phones, please see Mr. Darlin's article.
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