Thank Apple for dramatically falling flash memory prices

“When Apple Computer CEO Steve Jobs introduced the iPod Nano on September 7, he predicted it would be the best-selling iPod model ever,” Antony Bruno writes for Billboard. “That is a strong statement, considering the Nano is only Apple’s second device to incorporate flash memory instead of a hard drive. It is an even stronger endorsement of flash-based technology from a company that until this year declined to use it in a single product.”

“Flash-based devices store content on a chip, which unlike a hard drive contains no movable parts. This means flash players use less battery power — 30 times less –than hard-drive players, as well as being much smaller and extremely durable,” Bruno writes. “The trade-off is that flash memory chips have a limited storage capacity and a higher price than their hard-drive counterparts, which boast 10 times the capacity at half the cost. But flash costs are dropping dramatically. According to semiconductor research firm iSuppli, the price-per-megabyte cost for flash memory has fallen 56 percent in the last year. The firm projects the price will fall an additional 47 percent by next year and then another 33 percent by 2007.”

Bruno writes, “Analysts believe the falling flash prices are key to the evolution of the MP3 player as a mass-market device. Jupiter Research estimates there will be 56 million MP3 players in the world by 2010, and more than half will be flash devices that hold 1,000 songs or less, with about 5GB. ‘Flash-device sales will surpass hard-drive sales,’ Jupiter Research analyst David Card says. ‘But the technology is not important. What’s important is reaching a certain capacity at a certain price point at a certain size.’ Research suggests that most owners of hard-drive-based devices that can hold 10,000 songs or more do not come close to using the full storage capacity. According to Card, only about 20 percent of iPod users have more than 1,000 songs on their players. No surprise then that MP3 device manufacturers, including Apple, are counting on smaller and cheaper devices to drive the digital music player market forward.”

Full article here.

Advertisement: Apple iPod nano. 1,000 songs. Impossibly small. From $199. Free shipping.
56 million MP3 players in the world by 2010? Is that excluding the 200 million made by Apple or what?

Related articles:
Apple corners flash memory market with iPod nano – September 29, 2005
Disgruntled iPod also-rans accuse Samsung of ‘damage’ by selling Apple cheap NAND flash memory – September 29, 2005
Apple’s iPod nano forces price cuts on flash-based MP3 players in Taiwan – September 15, 2005
Apple’s music competition having tough time and the iPod nano won’t help them – September 14, 2005
Piper Jaffray: Apple seeing high demand for iPod nano – September 14, 2005
Apple iPod nano 32GB possible in second half 2006? Samsung unveils new flash memory NAND chips – September 12, 2005
Also-ran MP3 player makers miffed by Apple’s impossibly low price for iPod nano – September 09, 2005
Apple introduces iPod nano – September 07, 2005
Apple stomps competitors in flash-based MP3 player market – September 02, 2005


  1. “Jupiter Research estimates there will be 56 million MP3 players in the world by 2010”

    There are already more than 22mln iPods sold. Even if you say that 56 million MP3 players will be sold that year alone, is too low in my opinion.

  2. I’m one of the twenty per cent that has more than 1,000 songs on my 20 gig ipod. One of the reasons I didn’t buy a nano for the missus was the capacity was just too small.

    I just hope they keep bringing out larger capacity models. Eventually I want to digitise a large proportion of our 1,000+ vinyl collection and small capacity players just won’t meet my needs.

  3. MDN Headline that was never in the Story they cite: “Thank Apple for dramatically falling flash memory prices”

    What B.S. – If Apple wouldn´t have bought the things somebody else would. Thank Samsung and other makers of this type memory for selling them cheaper (and developing bigger and better memory). Thank all consumers for wanting to buy devices with this type memory.

    MDN always puts Apple first and Apple consumers and every other company else last.

  4. I have about 6k songs on my 40GB iPod, plus I use it as a portable HD to take files back and forth to work…. Guess I’m one of the minority in this area!

    But of course I also have a Shuffle to take to the gym and on bike rides, since my regular iPod is kind of ungainly for that use. This is a more-or-less “disposable” player that I can treat pretty rough and not worry over it much.

    The nano looks amazing, but it’s a bit too expensive for a disposable player, with too little storage for my big one. Some day, though, when they get 20 GB or so on one of those little guys, I’ll be first in line to get one ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

  5. I have close to 7000 songs and audiobooks on my 30 gig 3G iPod. I would like a nano but not so much because I need one as because they are just too cool. That makes it much harder to justify with the wifal unit. Now if they come out with a Video iPod with like 80 gig capacity it will be much easier to justify even if they are a lot more expensive.

  6. Capacity is definitely what would keep me from buying one. My 20 gig 3G is just about full. I like to be able to take my entire music collection with me, plus audio books. Right now I have to move stuff around. When the nano gets up to 40 gigs I’ll get one.

  7. Handsdown: a producer will only manufacture to a perceived market and price accordingly. If the market expands, pricing can be reduced. By rapidly expanding demand for 2GB and 4GB flash modules, Apple has guaranteed Samsung (and others) a larger market and allowed them to drop prices across the board. Therefore, Apple’s initiative has caused the price of flash modules to drop. QED.

  8. Malthus – which came first, the chicken or the egg?
    Samsung had already planned its production line long before Apple got involved. These type things take years to go on line. Samsung just announced it will spend $30 Billion over the next 10 years to build memory. You think they first got an order from Apple before they decided to spend and build for the next decade???

  9. “There are already more than 22mln iPods sold. Even if you say that 56 million MP3 players will be sold that year alone, is too low in my opinion.”

    Who cares about your opinion… Let’s just use basic math…

    First of all, the “22 million” number is nearly three months old, so factoring last quarters estimates, there should be about 28 million iPods sold so far… Industry estimates for this quarter are 8-10 million… That’s JUST counting iPods… Add in the rest and that means there will be about 12 million MP3 players estimated to be sold this next quarter…
    Now, just for arguments sake, let’s assume there is no more growth in MP3 player sales, and rather the numbers remain steady for the next four years… Absurd, yes, but for the sake of argument, remember… hat means there will be some 200 million iPods, and some 240 million MP3 players altogether…

    Now, let’s assume that there was a mis-statement… not as if that ever happens… and it was meant to be 56 million MP3 players sold in 2010, not in the world by 2010, or sold by 2010. okay? This is where your opinion actually matters… and I agree… I doubt the sales in 2010 will be ONLY 56 million, unless the market dramatically shifts in another direction… Does ANYONE think that is likely? Sure, there would be some breakthrough in tehcnology, perhaps something based on WiMAX, that makes on-demand music playing possible, but would such a device not be considered an MP3 player?

    Oh, well, never mind… MDN had it right when they added their take…
    “56 million MP3 players in the world by 2010? Is that excluding the 200 million made by Apple or what?”

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