Earlier this week, iSuppli issued a report that described Apple’s NAND flash orders as being “slashed.” Here’s an excerpt:
In an early warning sign of consumer weakness, Apple Inc. has slashed its 2008 NAND order forecast significantly and has informed suppliers that its demand growth will slow in 2008 compared to 2007, according to iSuppli sources. … Before word of Apple’s warning, iSuppli had predicted the company’s NAND flash purchases would rise by 32.2 percent this year, helping drive significant market growth.
Philip Elmer-DeWitt blogs for Fortune, “Sounds pretty ominous, and the paragraph may have played a role in shaving a couple points off Apple’s share price on Thursday.”
“But several commentators have taken issue with the use of the word ‘slash’ to describe Apple’s order forecast. As Tom Krazit at CNET points out, Apple’s demand for flash is still growing rapidly, despite the broader slowdown in consumer spending. In fact, by his calculation, Apple is still planning to purchase 27 percent more flash memory this year than last year — just not the 32 percent iSuppli had expected,” Elmer-DeWitt reports.
“Moreover, what’s bad for memory makers may actually be good for Apple. Chip prices were already plummeting (4GB flash memory fell more than 73 percent since last August, according to IDG), and a memory glut could drive them even lower,” Elmer-DeWitt reports. “As Richard Hyde writes in Seeking Alpha:”
Here is where the story gets interesting for Apple. Not only do they reap the benefit of huge decreased pricing, the difference between the 8GB and 16GB modules is only $11, even though the iPhone models differ by $100. Similar savings are seen in the 16GB and 32GB iPod touch.
Elmer-DeWitt reports, “No wonder Apple can afford to cut the price of the iPod shuffle from $79 to $49. If it wanted to drive up demand, it could probably afford to cut prices all across the iPod and iPhone product lines.”
Full article, with charts and links, here.
[Thanks to MacDailyNews Reader “Judge Bork” for the heads up.]