Market Watch

iPhone to Spur NAND Flash Undersupply in 2010


Thanks to its huge sales and high memory usage, Apple Inc.’s iPhone is expected to generate insatiable demand for NAND-type ash in 2010, straining supplies for the year, according to iSuppli Corp.

An average of 35.2Gbytes of NAND will be used in each iPhone sold in 2010, iSuppli estimates. Furthermore, iPhone shipments are set to rise to 33 million in 2010, up 31.5 percent from 25.1 million in 2009. With the iPhone already the largest application for NAND, this huge growth is likely to lead to some periods of undersupply for the year.

iSuppli forecasts that mobile handsets with embedded flash units will grow to 732 million units in 2010, up 13.8 percent from 643 million in 2009.

The success of the iPhone in the smart phone category has spurred the launch of a series of competitive mobile phones. These include the Motorola Droid, HTC Android Iris, Palm Pre Plus and Pixie Plus, and Google Nexus One.

Although these phones may choose a different solution for storage memory, such as a microSD card, they will still aim to match the iPhone spec for spec in terms of memory capacity. And that bodes well for NAND flash vendors.

Beyond the smart phone segment, a number of other promising products are driving the NAND market in 2010, including eBooks, smart phones and tablet PCs.

However, while eBooks such as the Amazon Kindle may follow a similar growth path as Apple’s iPods, they don’t use nearly as much NAND flash memory. eBooks contain a measly 512MBytes to 2GBytes of embedded NAND included in each device. While density will no doubt grow in the coming years as wireless Internet enables more features and functionality, NAND usage in eBooks will remain low in 2010, iSuppli predicts.

Tablet PCs—with an anticipated storage density of 32GBytes to 64GBytes of storage—have NAND suppliers salivating. However, it remains unclear if volumes will reach the projections of hopeful manufacturers. The introduction of Apple’s iPad, however, may boost the market. If that is the case and we see a similar adoption rate of the iPod and iPhone, this could be a serious market-changing segment for NAND vendors.

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