Creative Technology Ltd. (Singapore) has criticized the partnership agreement between Apple and a flash memory chip supplier, stating that it has created significant pressure on the entire music device market.
“One of the fundamental challenges we will face in the MP3 player business is the shortage of 1 GB flash memory chips,” said Craig McHugh, Director of Creative Technology. “The industry’s demand for high-capacity memory has recently exceeded supply, and this will impact the popularity of music devices during the largest shopping season. According to experts, this scarcity is essentially a consequence of a private contract that ensures Apple can meet the Christmas demand.”
McHugh did not name Samsung directly, but Apple has recently made public its agreement with the South Korean electronics giant regarding flash supply for music devices, particularly for the recently released iPod Nano, which replaces the iPod Mini line that was based on hard drives.
According to Sim Wong Hoo, CEO of Creative, several Chinese manufacturers have withdrawn from the market in recent months due to the pressure created by Apple. “If Creative is facing losses, many other companies will also struggle to cope with this battle. However, I believe that this agreement will not last long,” Hoo stated.
The negotiation has also faced criticism from South Korean MP3 manufacturers, with some suspecting that Samsung is supplying chips at low prices. The Chairman of the country’s trade committee has also revealed that an investigation into the agreement is likely to be conducted.
T.N.
