Apple is increasing its use of NAND flash technology in its future product development plans, and is designing a new subnotebook that uses NAND flash memory as its primary storage, according to American Technology Research senior analyst Shaw Wu. "Our sources indicate that Apple would like to introduce the [subnotebook] in 2H07 to further capitalize on its strong MacBook growth, but timing will be dependent on NAND vendors' ability to drive down pricing further, making it econmically attractive for Apple," Wu wrote in a research note obtained by MacNN. Despite aggressive price reductions in NAND flash over the past few years, analysis indicates that mobile hard drive storage still offers a price advantage of 7-8 times over NAND flash. Wu speculates that NAND flash in notebook PCs will likely be limited to the high-end ultra-portable market through 2007. The analyst also believes Apple is migrating the rest of its iPod line to NAND flash from hard drives, but says that fairly low price points and strong demand for high storage capacities will likely prevent this from occurring until late 2007-2008.

Wu also points to a widescreen video iPod under development at the Cupertino-based company, but suggests the new device won't ship until after the iPhone in June to avoid detracting from that launch.

"In the meantime, we anticipate the current video iPod to see storage capacity increases (there are currently 30GB and 80GB models)," Wu wrote.

Sources indicate that Apple is leaning towards using the same "mini" version of Mac OS X as the iPhone for future iPod models. Wu believes that factor could prove particularly important because the mini version of Apple's operating system has a much smaller footprint, running with as little as 4GB of space.