Market Insight

iPhone Nano to Eliminate Memory, DRAM to Benefit


It’s been widely reported this morning that the iPhone Nano (the rumored new, smaller iPhone form factor) will jettison all onboard memory (or at least most onboard memory as some will always be required for apps and such). The thinking behind this is clear: NAND can account for 25% of the total bill of materials for the existing iPhone. An easy way to reduce the cost of iPhones (and thereby increase sales volume) is to push content storage to the cloud.

This won’t be a form factor for everyone. Anyone that frequently finds themselves in areas where they are disconnected from the cloud (such as in poor cellular coverage areas or on planes) will want to keep a robust local storage component in their phone. But many people travel little and enjoy nearly ubiquitous strong network coverage. For this large group of potential customers the iPhone Nano would be very compelling.

There is one point that should be made very clear, however. Apple is not considering removing DRAM from the phone. DRAM will actually become even more critical as it will have to serve a larger buffer role as more data is streamed from the cloud. While this new device from Apple might be a bane for NAND, it will likely be a boon for DRAM.

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