Apple iPhone drives global sales of NAND flash memory

Apple Online Store Global sales of NAND-type flash memory for use in smartphones are expected to rise by nearly sixfold from 2008 to 2013, as shipments of the high-end cell phones boom in the coming years, according to iSuppli Corp.

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.

16 Comments

  1. “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.

  2. @ 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.

  3. “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.

  4. @Big Al

    I never saw the use in brown-nosing. Just wanted to control available resources as much as possible. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

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