March 12, 2010
Devices Using NAND To Stay Affordable This Year
The supply of NAND memory is being highly affected by several new mobile devices, leading to smaller inventories and greater earnings for manufacturers of NAND in the near future, as reported by industry analysts.
Because of the huge success of devices like the Android and iPhone, along with other new devices, the volume of mobile phones that carry NAND will increase 13.8% to 732 million this year, up from 643 million the previous year. In 2008, the rate of growth was 1.6%.
NAND memory is a type that will keep data saved regardless if the device is turned off, making it great for mobile phones, media devices, flash drives, and solid-state drives. The name NAND is short for "Not And" which is the form of circuit implemented in the memory design.
The largest consumer of NAND has historically been Apple. It is estimated that around 20-30% of worldwide supply belongs to them alone. They have also made agreements with suppliers like Toshiba in order to pay ahead of what it needs at the moment to avoid rising prices later on.
With each iPhone using up to 36 gigs of NAND, along with manufacturing of them heading over 30 million this year alone, coupled with coming periods of NAND being undersupplied, manufacturers and suppliers are both likely to benefit from sales of NAND rising up to 35%.
Other devices, such as tablets and e-book readers, will likely also create more demand for this type of memory in the coming year. The popular Kindle by Amazon doesn't seem to be creating much of an issue, with a smaller amount of memory coming in each one. However, as wireless becomes more popular and convenient, the storage in such devices will increase to meet the demand spurred by effortless downloading of information.
Tablets will become the more likely device to cause more demand, with up to 64GB of flash per unit. We will soon see if the tablet takes off with consumers, which would make NAND demand even more difficult to keep up with.
The economy of NAND flash memory is a volatile one, with demand and supply switching heavily for respective periods. A lack of spending on devices in 2008 brought down revenue for most companies, but sales rebounded in 2009.
Short supply may mean bigger earnings for companies, but the cost is not necessarily passed on to the customer. When prices rise based on the chip as a unit, that does not indicate an immediate rise in cost per gigabyte. Manufacturers are able to avoid increasing prices by marketing gadgets with a lower flash memory capacity and not increasing the size for next-generation models.
Apple's connection to making pre-purchases of NAND also prevents the need to make increases in the price of brand new products. Most companies in general like to avoid going above the expected market value of even their newest products.
A lack of NAND supply could have a more noticeable change in pricing starting next year. Suppliers will be faced with the choice of producing more chips or the cost of the newest products are likely to increase next year.
Because of the huge success of devices like the Android and iPhone, along with other new devices, the volume of mobile phones that carry NAND will increase 13.8% to 732 million this year, up from 643 million the previous year. In 2008, the rate of growth was 1.6%.
NAND memory is a type that will keep data saved regardless if the device is turned off, making it great for mobile phones, media devices, flash drives, and solid-state drives. The name NAND is short for "Not And" which is the form of circuit implemented in the memory design.
The largest consumer of NAND has historically been Apple. It is estimated that around 20-30% of worldwide supply belongs to them alone. They have also made agreements with suppliers like Toshiba in order to pay ahead of what it needs at the moment to avoid rising prices later on.
With each iPhone using up to 36 gigs of NAND, along with manufacturing of them heading over 30 million this year alone, coupled with coming periods of NAND being undersupplied, manufacturers and suppliers are both likely to benefit from sales of NAND rising up to 35%.
Other devices, such as tablets and e-book readers, will likely also create more demand for this type of memory in the coming year. The popular Kindle by Amazon doesn't seem to be creating much of an issue, with a smaller amount of memory coming in each one. However, as wireless becomes more popular and convenient, the storage in such devices will increase to meet the demand spurred by effortless downloading of information.
Tablets will become the more likely device to cause more demand, with up to 64GB of flash per unit. We will soon see if the tablet takes off with consumers, which would make NAND demand even more difficult to keep up with.
The economy of NAND flash memory is a volatile one, with demand and supply switching heavily for respective periods. A lack of spending on devices in 2008 brought down revenue for most companies, but sales rebounded in 2009.
Short supply may mean bigger earnings for companies, but the cost is not necessarily passed on to the customer. When prices rise based on the chip as a unit, that does not indicate an immediate rise in cost per gigabyte. Manufacturers are able to avoid increasing prices by marketing gadgets with a lower flash memory capacity and not increasing the size for next-generation models.
Apple's connection to making pre-purchases of NAND also prevents the need to make increases in the price of brand new products. Most companies in general like to avoid going above the expected market value of even their newest products.
A lack of NAND supply could have a more noticeable change in pricing starting next year. Suppliers will be faced with the choice of producing more chips or the cost of the newest products are likely to increase next year.
