Apple almost always gets the better part of any negotiation with its suppliers, but a sketchy report claims that this wasn’t the case when it came to buying RAM from Samsung.
The report says Samsung had asked for a 100% increase in price, expecting to negotiate down to 60%, but Apple’s desperation was such that it agreed to the first demand …
Apple has a reputation as an extremely hard-nosed negotiator when it comes to agreeing contracts with its suppliers. The company typically plays off two or three competing suppliers against each other, offering to give the largest slice of its order to the company that offers the best price.
The global shortage of memory chips, however, has meant Apple’s normally strong position has been significantly weakened. Many companies buying memory chips have had to agree to price increases of 100% and more.
Investment site DealSight (via WCCFTech) claims that Samsung had hoped to agree a 60% increase in the price of iPhone memory but had asked Apple for a 100% bump in the expectation of having to negotiate down from there. However, Apple reportedly agreed to the 100% increase.
An official in the semiconductor industry said, “Initially, Samsung Electronics’ DS division set a strategy with the goal of increasing the price of LPDDR5X for Apple iPhone by about 60%.” “However, at the first negotiation (to gather opinions at 60%), they first proposed a 100% increase, and Apple immediately accepted it and the price was decided as it was. That’s how desperate smartphone companies are to secure memory inventory,” he said.
9to5Mac’s Take
I’m somewhat skeptical about the specifics of this claim, given that very few people would have been privy to the details of the negotiations, and all involved would have been rather senior execs. However, it is possible that one of the Samsung team involved was so proud of the deal that they were indiscreet in boasting about it.
Either way, it’s certainly true that tech giants have been faced with price rises of this magnitude, and Apple won’t have been able to escape.
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