September 11, 2005

Korean MP3 Companies Whine About Nano

Korean MP3 companies are sulking that they can't compete with Apple's new iPod Nano because Samsung gave Apple such a low price on flash memory. Well that's how the free markets works guys. Apple with their market share can bully component manufacturers in getting a low low price because they are going to be ordering A LOT more flash memory than anyone in the industry. Economics 101.

The domestic MP3 player industry is sulking, saying the iPod nano owes its exceptionally low price to Samsung Electronics. “Memory chips affect more than 50 percent of MP3 players' prices. Apple presumably bought the flash memory chips at a 50 percent discount from Samsung.” But Samsung Electronics executive Joo Woo-sik defends the company. “I can’t tell you the discount rate, but it stands to reason that we expand the range of discount rates for a big buyer like Apple,” he said. "Samsung didn’t mean to do any harm to domestic MP3 manufacturers.”