Toshiba has been a long time supplier of flash memory for Apple Inc. (NASDAQ:AAPL) and its mobile gadgets. The Japanese tech company is selling off its chip business to the highest bidder. However, Western Digital wants to keep retaining the business unit’s control. The company already made several attempts to do this. In light of these events, the makers of the iPhone sent a warning to Western Digital.
Those close to the matter say Apple Inc. threatens to cease purchasing products made by Western Digital. That is only if the company does not stop its attempts to secure control of Toshiba’s processor business.
IPhone and iPod flash memory chips derive from Toshiba. The company is actually Apple’s biggest and long-term supplier of NAND flash memory. The business landing in the hands of a rival is a headache Tim Cook and co. would much rather avoid.
Apple Inc is serious about Toshiba
Apple is willing to put down $460 million in order to help fund any bid that sees Western Digital stay as a minority investor. The U.S.-based tech giant even extends its offer to consortia backed by Taiwanese assembly giant and partner Foxconn.
The real concern for Apple Inc is losing influence of the Toshiba business’s pricing power to an outright market rival. The company would much rather the chipmaking unit stays in the hands of a close supplier than in the control of Western.
Both Apple Inc. (NASDAQ:AAPL) and Toshiba refuse to comment about the details of the discussion. An $18 billion bid is allegedly offered by Western to secure the Toshiba business component. The corporation clearly means business and holds a long-term, high stake interest in the Toshiba’s chipmaking.
In fact, the company believes it has right of first refusal to the unit on the bidding table. Afterall, it is jointly involved in the business itself and now pursues several legal actions to win its control.
The shares of Western Digital are in the red, down more than 2 percent during Friday trade.