Apple is rumored to have threatened not to purchase Western Digital products in the future, should the storage company attempt to take over Toshiba's chip business. Doing so would give Western Digital control over Toshiba's NAND flash memory production, of which Apple is a customer.
Apple, which uses Toshiba's NAND flash memory chips in its iPhones, is concerned about losing pricing power if Western Digital is running the operation, the sources said on Friday.
However, if Western Digital remains a minority investor in the business, Apple, a top customer for Toshiba chips, is offering around 50 billion yen ($460 million) to a group including the U.S. firm to help finance a bid, one source said.
Toshiba is seeking to finalize a deal on one of a number of bids for the chip business in order to avoid reporting negative net worth or liabilities exceeding assets for the second year in a row. All three bids that Toshiba is entertaining are said to involve Apple in some way, due to the company's status as one of Toshiba's largest customers.