“According to a report entitled ‘New iPods Will Spur 2H06 Recovery in NAND Flash’ from research consultancy Gartner, strong growth in the portable media player market is expected in 2006, as the market is forecast to reach 187.7 million units, up from 134.5 million units in 2005,” Gene J. Koprowski reports for TechNewsWorld.
Koprowski reports, “The demand for portable media players such as Apple’s iPod, is the primary driver of sales of NAND flash memory. NAND flash-based players accounted for 80 percent of the market in 2005. So-called hard disk drive (HDD)-based portable music players make up the remaining 20 percent of the market. ‘We expect Apple to introduce a new, high-end NAND flash-based iPod by the fourth quarter of 2006, and this player will most likely have 10GB to 12GB of storage capacity,’ said Jon Erensen, a research analyst for Gartner. ‘The impact of an iPod with this storage capacity will have significant implications for the NAND flash market.'”
“Last fall, Apple introduced the 4 GB iPod nano priced at US$249 and the 1 GB iPod shuffle in January 2005 at $149. At the time, these NAND flash-based players represented the most aggressive pricing found in the portable media player market,” Koprowski reports. “‘Both of these introductions had a significant impact on the market, with competing vendors reacting by lowering prices and increasing capacities,’ said Erensen. ‘Apple accelerated the highest available capacity [and] average capacity, and lowered the cost per MB for NAND flash players with the shuffle and the nano. We anticipate a similar course of events in the second half of 2006.'”
“Though demand has not dropped for flash memories, prices have. The present environment for NAND flash-based players experienced a decline in the first quarter of 2006, falling by 25 percent on average. Pricing was soft in the second quarter, but firmed up in the second half of the year,” Koprowski reports.
“Erensen forecasts that a 16GB memory chip will be available in the third quarter for about $30, down from its current price of about $35. Apple’s procurement power and investment totals are substation, so it is conceivable that it could get pricing for a device at $25 or even $20, he added,” Koprowski reports. “This pricing would enable capacities of 12 GB, leaving enough room for the remaining component and manufacturing costs as well as Apple’s margin, while still reaching a coveted $250 price point.”
Full article here.
[Thanks to MacDailyNews Reader “Pieter” for the heads up.]
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