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iPhone, new iPods to spike memory prices?

updated 11:40 am EDT, Fri July 6, 2007

iPhone Spikes Memory Price

The increasing popularity of iPhones, iPods, and their reliance on flash memory could paradoxically cause problems for the memory-making industry, according to industry representatives and analysts. By building in as much as 8GB of NAND flash storage in the iPhone and potentially switching to flash for future high-end video iPods, Apple is threatening to dry up the overflow of memory that currently exists in the market, curbing discounts and possibly forcing price hikes to discourage buying an excess of flash chips.

In particular, Apple's emphasis on relatively large quantities of flash for its first phone could be especially troublesome, says memory producer Kingston Technology's flash marketing head Mark Leatham. The average of 6GB of memory per iPhone is 100 times larger than the typical cellphone, which the executive believes to hold only 60MB. An order for 5 million iPhones would by itself be equal to producing enough flash for half a billion ordinary cellphones, Leatham says. Estimates from iSuppli and Goldman Sachs suggest this may be realistic, putting added strain on supply chains even if the line were to remain static.

But adding more flash-based iPods could skew the market further, claims analyst group DRAMeXchange Technology. The mixture of significantly expanded use of flash with the usual climb in iPod sales during the end of the year may create supply issues as well as tip the balance of the flash industry in favor of Apple, which DRAMeXchange estimates could make up a quarter of the entire flash market with such a change.

Apple's decisions in 2007 could also have a trickle-down effect to other device makers, analysts commonly observe, as cellphones, media players, and other electronics are forced to ramp up their default storage to remain competitive.

by MacNN Staff




  1. jameshays

    Joined: Dec 1969



    Well, this is how supply and demand works. If these companies can't produce enough supply, more companies will join in the mix if the demand is sustained.

  1. jimothy

    Joined: Dec 1969


    iPod nano

    The 8GB iPod nano, of course, has already been on market for months. How do its sales compare to the expected sales of the iPhone? Sure, the iPhone may 100 times more than your average cell phone, but they'll also be much lower volume.

    Also, it's not as if the iPhone has a hundred "typical" Flash memory chips in it; it's got one (or two) higher capacity chips. So, it MIGHT have an impact on high capacity Flash prices, impacting smart phone and digital camera consumers, but your typical cell phone? I doubt they'll be impacted at all.

  1. alansky

    Joined: Dec 1969



    What kind of BS is this? The industry has only known about the iPhone for SIX MONTHS? And did they think that Apple would not continue to upgrade the fabulously-successful iPod? What have they been waiting for? An invitation?

  1. Smurfman

    Joined: Dec 1969


    re: huh?

    I think this article, and those being quoted, are more Apple/iPhone competitors (i.e. those who Apple did not choose to provide the Flash memory).

    The argument of this article is ludicrous! As others stated, supply/demand will push others to get into the market or existing to ramp up supply. This is a GOOD thing!

  1. MiMiC

    Joined: Dec 1969


    Samsung ships 64 Flash

    Samsung ships 1.8-inch 64GB flash drive

    This is what i want to see in the next iPhone : )

    Much storage for my on the go life.

    Yes.... damn it, i'll pay it.

  1. McDave

    Joined: Dec 1969


    I think you're all right.

    Though there are other 8GB devices out there they aren't the mainstream for the flash market. iPhone (& maybe new iPods) will lift the game in terms of volume and the supply sector will have to adjust. A lag in that adjustment will cause a temporary price-hike but it's only temporary.

    iPhone and flash video iPods will make that decent quality, solid-state video camera happen more quickly - so I can replace my DV at last.


  1. LouZer

    Joined: Dec 1969


    Re: huh

    The argument of this article is ludicrous! As others stated, supply/demand will push others to get into the market or existing to ramp up supply. This is a GOOD thing!

    But ramping up flash memory supply isn't something where you can just decide "Let's start making flash memory!" and a month later supply has doubled. The investment costs and time required to expand production is high.

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