Apple may come out with a notebook that has a drive made from flash memory, according to Shawn Wu of American Technology Research, and that could become a big boon to a market under siege.
Video iPods from Apple may also suck up a lot of the flash out there, he adds. SanDisk, one of the big makers of flash but not a supplier of Apple, said the devices could account for 10 percent of the NAND flash output in the fourth quarter, if the industry is lucky. (NAND is used in MP3 players; NOR flash goes into cell phones.)
Wu didn't say how much Apple's mininotebook would cost, but expect a hefty price tag. SanDisk earlier this year announced a 32GB flash-based notebook drive. It costs $600 more than a conventional notebook drive. 32GB of flash costs about $160, or nearly eight times as much as a 32GB notebook drive ($22). And although flash prices are dropping, so are hard-drive prices.
Samsung has already come out with a flash-based notebook, and Intel has designed some for foreign markets. Most analysts expect flash notebooks to be a niche market for a while. Apple may have an advantage in garnering sales in this market because history shows that the company's customers are willing to pay higher prices for computers. (Varying reasons include style, branding and loyalty.)
Flash notebooks are expected to be smaller and to withstand a drop from a table better than standard notebooks with hard drives.
For the past few years, the NAND flash memory business was the place to be. Manufacturers were gobbling up all of the chips companies like Samsung and Toshiba could produce. Prices were dropping fast, but volume shipments were growing more rapidly.
The smell of bad news, however, began to crop up in August 2006, when reports showed that revenue wasn't growing as fast as in the past and that flash prices were dropping faster than expected. A lot of factory capacity came online, and suddenly, supply was drifting upward while demand was stabilizing. Prices were dropping at 60 percent, faster than the historical norm of 42.7 percent.
Since then, the price cuts have begun to outpace demand, hurting profits and revenues. In reality, that's actually the norm for flash. Making flash memory has mostly been unprofitable over the years. Like we've said before, memory isn't a business. It's a bad gambling habit.