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General discussion

Component hoarding, Anti-competitive, Motorola, RIM, Apple

Jan 23, 2011 7:48PM PST

Dear Buzz Gang and Crew,
Should component hoarding be viewed as an anti-competitive practice? Apple recently sunk $3.9 Billion in contracts for guaranteed supplies and components for its products. Very few if not many corporations can do that. Apple is the largest buyer of NAND flash memory which is used in many electronic devices.

Apple Component Maneuvering:
http://www.appleinsider.com/articles/11/01/21/apple_doubles_board_suppliers_for_ipad_2_ahead_of_april_launch_report.html


Results:
Motorola Xoom intro price: $800 dollars
http://www.zdnet.com/blog/computers/latest-motorola-xoom-rumors-coming-to-best-buy-on-february-17-costing-800/4930

Dual Core Rim delayed due to component costs:
http://www.intomobile.com/2011/01/07/blackberry-dual-core-processor-cost-power/

My view: This should be watch closely to determine if component hoarding is occurring.

Just a thought. Later People. Happy

Discussion is locked

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Supply - Demand
Jan 23, 2011 9:54PM PST

If there is that much demand for a component more factories can always be built. Unless companies were actually paying suppliers to specifically NOT respond to market demands I don't see how this sourcing your products well in advance is an anti-competitive practice. Its just smart business.

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Agree & Disagree minimalist, reports from iSuppli ;-)
Jan 24, 2011 2:03AM PST

Dear minimalist,
I would agree that Apple's maneuvering to lock up key components is a smart business decision. Many government throughout the world right now have laws against hoarding of essential commodities. Even the U.S. has such anti-hoarding laws which have been enforced in the past during emergency situations. Most of these laws however focus on food and essential raw materials used in consumption based industries. Currently, there is no law against the buying up of essential components used in technology manufacturing.

To build a NAND OR TFT plant for mass production for computer and technology components takes years of planning, construction and a good deal of money. Such plants cannot be built over night. Isuppli has published repeated warnings of supply shortages and gaps occurring in key components for mobile phones and tablet devices.

http://www.smartgorillas.com/?p=2332
http://www.pcr-online.biz/news/35602/NAND-flash-market-sharply-up-in-2010
http://www.eetimes.com/electronics-news/4212448/Chipmakers-capabilities-ranked

My point is: There has never been a situation where such key components inventory levels have been so low. This will be an interesting issue to watch to see if the EU or the U.S. step in with modified laws to cover information technology manufacturing.

Later Happy

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I know it takes planning and time to build facilities.
Jan 24, 2011 3:01AM PST

But that's the way the free market works. If you didn't anticipate that components for tablets were going to be a hot commodity and that companies would pay to have first pick then you, my fiend, have just been caught with your pants down.

Hording of essential commodities like food, water and gas is a totally different thing than paying to have first choice of touch screens or RAM.