Global revenue from sales of NAND flash for mobile phones is set to rise to $932.5 million in 2013, up from $166.5 million in 2008. This will represent a Compound Annual Growth Rate (CAGR) of 41.1 percent, compared to the 12.2 percent increase during the same period for the overall NAND flash market.
“Soaring sales of smart phones, combined with the increasing density of NAND flash in each handset, is causing sales of the memory in this area to boom,” said Michael Yang, senior analyst for mobile and emerging memories at iSuppli, in the press release. “NAND flash makers can thank Apple Inc. for starting this trend, with its iPhone models injecting new life into the memory market. However, with the introduction of the a new generation of ‘iPhone killers,’ multiple smart-phone makers now are helping to drive NAND demand.”
The market for smart phones is expanding at a much faster rate than that of the overall wireless handset segment. Smart phones will account for 26.4 percent of total cell phone unit shipments in 2013, up from 13.1 percent in 2008, according to iSuppli. The iPhone is a major factor driving the growth.
“Apple announced it sold 5.2 million iPhone 3G and 3GS models during its fiscal third quarter, which ended in June,” Yang said. “Furthermore, Apple plans to introduce the iPhone in China, possibly early next year. This will open up the market for the iPhone to a new potential audience of 1.3 billion people.”
The continued influx of iPhone wannabes will further drive the expansion of the smart-phone market.
Along with spurring the growth of the smart-phone market, Apple has taken a leadership position in enhancing the functionality of these products by adding additional NAND flash memory to its iPhone line.
“The more NAND in a smart phone, the more useful it becomes, able to store more songs and video clips, to hold more map data and download more programs from an applications store,” Yang said. The initial iPhone base model, introduced in January 2007, integrated 4Gbytes of NAND. The latest version of the iPhone, the 3GS unveiled in June, upped the low-end model’s NAND density to 16Gbytes. The high-end 3GS integrates 32Gbytes of NAND.
The current crop of iPhone wannabes, including the Palm Pre, BlackBerry Storm and the T-Mobile G1, all include 8Gbytes of NAND. However, some models are increasing their NAND density to higher levels. For example Nokia’s N97 embeds 32Gbytes of NAND flash.
iSuppli predicts NAND densities in smart phones will continue to increase. Due to this and the rising sales of smart phones, the average NAND density in all mobile phones will expand in the coming years.
The average amount of NAND flash in all mobile phones shipped worldwide will rise to 5.8Gbytes per handset in 2013, up from less than 1Gbyte in 2008.
Read more about the NAND Market here.
MacDailyNews Note: On July 21, 2009, during the company’s conference call with analysts, Apple revealed that during the last quarter, the company pre-paid $500 million to Toshiba to secure NAND flash supplies.
“MacDailyNews Note: On July 21, 2009, during the company’s conference call with analysts, Apple revealed that during the last quarter, the company pre-paid $500 million to Toshiba to secure NAND flash supplies.”
This reminds me my college days (pre-internet). If we got a lecture on a new topic, especially right before finals, I would run to the library and check out all the books I could find on the subject. I read the books, which would make me smarter, and my classmates would not read the books, because I had them. Since we were graded on the curve.
When Apple ponies up half a billion for dibs on the premium lots of the world’s supply of high-density NAND, they get a similar double benefit. They get a discount on the premium supply (which drives their cost down for Apple), and leaves everyone else to bid for the leftovers (which drives costs up for Apple’s competitors).
Just another advantage of being an innovator – first to market gains early volume, and economies of scale.
meant: “Since we were graded on the curve, the advantage was mine.”
Apple has a virtual monopsony (yes, I spelt that correctly) on the flash memory market, leaving the other players to fight for the scraps.
It means when there is only one buyer in the market….
Thank you, I learned a new word today!
@ Deus Ex Technica,
There were 2 guys like you in our engineering classes. We’d take our time getting to the library after because as long as we weren’t too late we would catch the two of them fighting over every reference book on the topic at hand.
In the end, those two brown nosing bastards usually ended up with nothing.
“Due to this and the rising sales of smart phones, the average NAND density in all mobile phones will expand in the coming years.”
Let’s not go out here on a limb or anything.
I feel enlightened knowing that memory will increase in the coming years.
MediaXYZ
Good word, thank you.
@Big Al
I never saw the use in brown-nosing. Just wanted to control available resources as much as possible.
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This is all fine and good but why not tell us which is the best NAND supplier to have stock in. Is Toshiba the best choice?
MediaXYZ – yeah, it’s unfair competition all right – Apple has the iPhone and OS X; others have crap. Apple has the cash (from the great product) and the vision to pre-order, while others can’t copy Apple’s moves fast enough. Surely the government must do something about it and force Apple to tip all its secrets, expertise, R&D;, and plans to its competitors, or restrict the suppliers to not sell their NAND to the highest bidder.
Thank God for economists.
Don’t get me wrong – I am not in any way suggesting that Apple’s position is in any way unfair. They have good product and shift mountains of them, and that sort of turnover gives them leverage with component suppliers that other manufacturers only dream of. That’s business.
I was just happy that I knew the word – it came up in a crossword the other day .
The laughable thing about this article is the fact that when the iPhone was first introduced, the complaints by M$ et al were that it didn’t have slots for external memory cards!
You know? the cards made by Sandisk, Creative, Sony et al? The cards that did not have room to write what was on them and therefor you had to try each card until you found the right one? The deck of cards that weighed down your pockets or briefcases? You know? you know?? (asked to the tune of Stewie’s voice in Family Guy)
@ Crabapple
Everyone always laughs at Apple. Like when they did away with the 3.5 inch floppy drive. Or the optical drive on the Air. Or having large amounts of internal memory in their MP3 players instead of external cards.
I’m sure there’s plenty more examples people could give. It’s just funny how “shortsighted” the naysayers say Apple is. Then 18 months later, the rest of the computer market is doing the same thing.
@ MidWest Mac
(Then 18 months later, the rest of the computer market is doing the same thing.)
Right you are, I would further add, “trying without similar success to do the same thing”.
Because as you remember when Apple inc. announced they were placing a massive order for NAND flash cards, nobody knew with certainty what the cards were for even though we, the faithful had an idea. The Naysaying nabobs were dooming & glooming about how costly NAND was compared to HD’s and how many NAND cards it would take to replace for example a 250GB drive.
Now they know, now they try, but oh! dear what can the matter be? ANS: NAND flash cards are not available to buy right now sir/madam but if you place an order and pay for it upfront, we will deliver them to you in two years. The good news is that the NAND cards are cheaper than when Apple inc. first bought them, the bad news is that they will probably be even cheaper by the time you take your delivery. The worst news of course that no one will be willing to tell you is that Apple inc. will have moved on to where the puck will be and you will find yourself unable to flog the appliances containing the NAND cards because they will be yesterdays technology!!
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http://macdailynews.com/index.php/weblog/comments/14209/ ( I was off the mark then as is everyone else when it comes to Apple inc. products.