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Korean Firms Accuse Samsung of Playing Favorites w/Apple

Wednesday, September 28th, 2005 at 1:30 PM - by

Korean MP3 player manufacturers are crying foul over Samsung's agreement with Apple to supply the iPod maker with NAND flash memory at 30-40 percent below market pricing. The companies accuse Samsung of putting other Korean manufacturers at a disadvantage, according to a report from Korean publication Biz/Tech, a charge Samsung officials denied.

“There was nothing unfair about the businesses with Apple,” said Hwang Chang-kyu, the CEO of Samsung’s semiconductor division.

Instead, the pricing benefit Apple is getting stems from the fact that it was an early adopter of Samsung's new MLC style chips that can store twice as much information at a substantially lower cost than the SLC chips used in other MP3 players. Effectively, this helps keep iPod nano costs down, while maintaining the performance users expect from Apple products.

Other manufacturers, however, aren't so happy. They fear that this will serve to tighten Apple's strangle-hold on the MP3 player market. “It’s true that the company that has the largest market will have the edge. Buying 100 units and buying one can’t be same," Chang-kyu said.

Currently, Apple is the only company purchasing MLC memory, but Samsung says the chips are available to any vendor that wants to purchase them.

There is additional information in the full Biz/Tech article.

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