Apple pulls out of Samsung flash memory joint-venture

Damn, we knew that people in Korea were pissed at Samsung for their recent, uh, corporate malfeasance (price fixing and other corporate scandals), but we didn't know it was bad enough for Apple to pull out of a proposed $3.8 billion joint-venture to build flash chips for portable devices. Reuters reports that Apple had proposed the venture, but pulled out because of growing "anti-Samsung sentiment" among "political and civic groups" there in Korea. We can totally see why Apple would want to get in on this biz, a JV with Samsung would basically guarantee them a cheap source of flash memory for future iPods, and according to Reuters they're already in talks with another flash memory maker about a similar venture.

[Thanks, CoreyTheGent]

[Cutter White @ Dec 19th 2005 12:20AM]

Woop diii doooo!

[Ian Jardine @ Dec 19th 2005 12:20AM]

How weird. Samsung will survive to live and prosper. So is Apple killing the cheap 4 gig flash drive deal as well? I doubt it...

[Spyvie @ Dec 19th 2005 12:20AM]

Bwaa ha ha, Bwaaaahaahaaahaaaa

[Charlotte Web @ Dec 19th 2005 12:20AM]

It's a bargaining chip.

Samsung is in the hot seat. for price gouging, of all things. Apple acts like they are pissed off, starts shopping around their $3.8 billion contract. Samsung execs start hyperventillating, offering Apple an extremely deep discount to stay. Steve Jobs is a shrewd negotiator, I'd bet money that Apple is going to end up staying with Samsung.

Honestly, who's going to refuse to buy an iPod because it uses Samsung memory?

[Computers.net @ Dec 19th 2005 12:20AM]

I don't know about you, but I'm going to start accusing Apple of shady business practices because they almost used Samsumg memory...

[uclatommy @ Dec 19th 2005 12:20AM]

Its a smart move by Apple to pull out before the shit hits the fan. They don't want to be associated with the bad press. It would hurt the company image, but I am worried about the future pricing of their ipods now. It probably will not rise, but it may hurt Apple's profits by increasing the cost of production.

[matt @ Dec 19th 2005 12:20AM]

forget the article - is that a 16GB CF card? wtf? where's my 16GB nano?

[CoreyTheGent @ Dec 19th 2005 12:20AM]

It's not a matter of people refusing to buy iPods because of Samsung memory, it's a matter of the US and Korean governments digging into their venture. There's already a possible probe into the flash memory deal for the iPod nano, imagine how much heat -this- would bring. Samsung's legal problems aren't going anywhere, they seem to be getting worse.

As for it being a bargaining chip, I'm sure there already was a rock-bottom deal on the table. Apple wouldn't accept anything less.

[Ken @ Dec 19th 2005 12:20AM]

Good Bye Nano it was nice to know you.

[MadaMadaDane @ Dec 19th 2005 12:20AM]

Granted, I don't run a multinational multibillion dollar corporation (IDRAMMDC), but it seems kinda cold to turn on the company that just made your latest product possible.

I know, the allegations against Samsung include more than the Apple flash memory deal, but for Apple to just turn its back on Samsung for negative press and inquiry that Apple is partly responsible for...well, it's almost comical.

[uclatommy @ Dec 19th 2005 12:20AM]

In business, the companies that put out, get laid. But if they're going to drag you through the mud, then you break up with them faster than a teenager breaks up with the girl he just got pregnant. In this case, Apple is like Hugh Heffner and all the other companies are like nubile young girls aspiring to be playboy bunnies. They'll behave badly just to get into bed with Apple.

[Andy @ Dec 19th 2005 12:20AM]

Hah - Samsung just lost so much money it's not even funny.

[Spence @ Dec 19th 2005 12:20AM]

I agree with poster #4.

Excellent move by Apple. Flash Memory is a comoditized market. If your bread isn't buttered by OEMs then your fighting the price game in the open market.

Sucks for Samsung. Any bets on who Apple ends up partnering with?

[Za @ Dec 19th 2005 12:20AM]

uclatommy FOR THE WIN!

[Shnugi @ Dec 19th 2005 12:20AM]

I hope Samsung whacks Apple in the back by signing lower cost deals for flash memory to iRiver, Creative and iAudio.

[uclatommy @ Dec 19th 2005 12:20AM]

>>Za,
No, a winner is you because price wars drive down costs which is good for the consumers.

[bufu3284 @ Dec 19th 2005 12:20AM]

This is great news, i-river, toshiba and creative are being killed by apples low price offerings on their nano, if theres no competition then the dominate company is able to pull off as much crazy shit as they'd like and people are be forced to buy into it. Shame on Samsung for cutting a cheap deal with crAPPLE and screwing everyone else in the market, justice has been served (hopefully more to come, apple+samsung)

[CoreyTheGent @ Dec 19th 2005 12:20AM]

This venture was for future endeavors, it has nothing to do with the deal for the iPod nano. It was more like Samsung and Apple shaking hands in agreement to make this magic happen again (and there's nothing that says they can't go back to the drawing board later on).

iRiver, Toshiba and Creative will continue to be killed by low-price offerings on the nano. Apple has secured enough flash memory from Samsung to last them through 2006 at least.

[JohnnyCashAK @ Dec 19th 2005 12:20AM]

Do you people not read the news? Good god, this fine that's giving Samsung so much shit right now is from their other memory sales that involves other major manufacturers like Micro etc. In that instance, they were all found guilty of illegalling INFLATING the cost of memory, not selling it too cheaply in an attempt to corner the market like the Korean companies have accused them of doing with Apple. In any case, while there is an ongoing investigation by the Korean government, so far that have been NO charges pressed against them or Apple. These are two completely different matters and this will most likely not effect the price of Nano's.
I think it's funny that Iriver and Creative would raise such a stink about it, considering both have obviously had to pull some underhanded deals to remain where they are in the market as well.
Besides, if you people are dumb enough to let brand loyalty blind you to the benefits of price wars, then you obviously are still living off of mommy and daddy and don't have to worry where your own hard earned money goes.
Recent instances of price wars in the auto industry made me the winner this summer, when I was able to buy a brand new top of the line truck for 2k less then this other guy wanted for a 3 year old model I would have bought if not for employee pricing sales.

[nano @ Dec 19th 2005 12:20AM]

A move like this takes serious balls. Kudos to Jobs. Either way Apple will be fine. $3.8B is not pocket change, _someone_ will make chips for them at the price they require. They're like the single biggest buyer for these chips, they can dictate their own terms.

[Danielboy @ Dec 19th 2005 12:20AM]

Apple is just punishing Korea for it's accusations of price fixing. I have a feeling that Apple will bring it's business to another country, perhaps Taiwan or China, where MP3 players are not a catalyst for patriotism.

[MGD @ Dec 19th 2005 12:20AM]

China and Taiwan have nothing to offer but stinky tofu, chicken feet, and cheap rip-offs.

[ConceptVBS @ Dec 19th 2005 12:20AM]

#20

Yeah, good luck with that.

2.2 Billion Chinese people look at an Apple iPod and what do they see? 2.2 Billion Apple ripoffs for $2. Yeah, Apple will make TONS of money in that country....

[Danielboy @ Dec 19th 2005 12:20AM]

Stinky tofu like ipods?

[daddy_fizz @ Dec 19th 2005 12:20AM]

#7

most likely a 16gigabit card = 2gigabytes...

[kema @ Dec 19th 2005 12:20AM]

I think Apple just killed off the best deal ever happened to them in MP3 business.. By teaming up with Samsung, Apple got the huge discounts to kill off any competition and ensured Samsung, the biggest potential competitor, staying out of the business.
Now that the deal's off, expect Samsung to launch all out attack on MP3 front. Can you imagine Samsung Semiconductor providing endless stream of flash memories at a bargain bin price to Samsung Elecronics division?
All along Samsung said it wants become the biggest player in MP3 market by 2007. Samsung's business in this market's been pretty dormant. I think Samsung was thinking "if you can't beat 'em join 'em" so far, but now that they got no choice but to compete with Apple face to face to get anything out of this market, I expect some serious effort Samsung..

[jc @ Dec 19th 2005 12:20AM]

I think Apple just killed off the best deal ever happened to them in MP3 business.. By teaming up with Samsung, Apple got the huge discounts to kill off any competition and ensured Samsung, the biggest potential competitor, staying out of the business.
Now that the deal's off, expect Samsung to launch all out attack on MP3 front. Can you imagine Samsung Semiconductor providing endless stream of flash memories at a bargain bin price to Samsung Elecronics division?
All along Samsung said it wants become the biggest player in MP3 market by 2007. Samsung's business in this market's been pretty dormant. I think Samsung was thinking "if you can't beat 'em join 'em" so far, but now that they got no choice but to compete with Apple face to face to get anything out of this market, I expect some serious effort Samsung..

[Whitney @ Dec 19th 2005 12:20AM]

"most likely a 16gigabit card = 2gigabytes..."

No, it is 16 gigabytes. Labeling in gigabits would be fairly ridiculous.

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