Apple-Samsung: Killing Them Softly with their Song


Apple's release of the iPod Nano last week transformed Apple into the biggest consumer of flash memory in the world, CEO Steve Jobs said last week.

But that's not all. A lot of the flash output comes from Samsung, Apple's erstwhile rival. And although Samsung is ramping up MP3 player production - around 10 new models will be released by the company through 2006 - the Korean company is apparently willing to forego profits on its own players, while continuing to supply Apple with flash with the other hand, the Korean Herald reports.

Apple certainly got good pricing for its flash deal - otherwise it wouldn't be releasing 4GB and 2GB at $249, and $199, respectively - and that means Nano will have it all over the competition, none of which will be able to offer similar product for the same prices.

Korean MP3 player manufacturers said to the Herald, "We have no measure to cope with the giant's superiority in terms of competitiveness in both efficiency and price."

And, what's more, apart from Apple, no one's making any money. Margins are extremely tight, and so will flash supply.

Analysis: And so the iPod juggernaut rolls on - and Gates' prediction of iPod being a flash-in-the-pan is looking, well, thin.

Thinner than a Nano.