Rolfe Winkler at The WSJ: ‘The Beleaguered Chip Sellers Getting Their Revenge on Apple’
Rolfe Winkler, in a crackerjack story for The Wall Street Journal (gift link): Blevins, who left Apple in 2022, sometimes set up back-to-back meetings with suppliers so that rival sales teams might run into each other, stoking competitive tension. Sales representatives learned to pack nutrition bars to sustain them through negotiating sessions that Apple executives sometimes pushed past midnight…
Rolfe Winkler's recent article in The Wall Street Journal explores the competitive landscape between Apple and its chip suppliers, particularly flash memory. Former Apple executive Jeff Blevins played a role in stoking this rivalry by setting up competitive meetings between suppliers and rival sales teams. Apple's frequent audits of suppliers' books and the requirement for flash makers to treat Apple as a "most favored customer" have helped the company secure favorable pricing, according to those familiar with the agreements.
However, a notable excerpt reveals that Apple's dominance in flash memory sales has waned, as AI datacenter hyperscalers have emerged as the top buyers. Despite this shift, Apple continues to negotiate the best deals it can for itself, though the rising costs of flash memory have impacted Apple's historically high profit margins.
The article also touches on Scott Nelson, the chief marketing officer at Kioxia (formerly Toshiba), who expressed disdain for Apple and shared a personal anecdote. The narrative concludes by highlighting the industry's low point in 2023, when flash prices hit a low of 5 cents per gigabyte, leading to a $19 billion operating loss in the industry, while Apple earned $14 billion in gross profit from flash storage upgrades.
Written by urgent.news from Daring Fireball's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
