Apple cuts expected flash memory spending by $200M
Apple has cut its 2008 flash memory orders by $200 million, according to iSuppli, setting up a down year for flash vendors.
In February, iSuppli reported that Apple was slashing its orders of flash memory amid a weakening economy, but iSuppli wasn't sure exactly how far the cuts would go. After crunching the numbers, iSuppli now expects Apple to spend $1.4 billion on flash this year for iPods and iPhones, up 12 percent from $1.2 billion last year. But the analyst firm, and the flash memory industry, had been expecting much more purchasing out of Apple, at least $1.6 billion.
The overall flash memory market is in turmoil, as overcapacity and slowing demand come together at the worst possible time. Plunging flash memory prices are expected to dent Intel's first quarter, among other companies likely to be affected. iSuppli projects that the entire market will grow just 9 percent this year to $13.9 billion, down from previous expectations of 27 percent growth to $17.9 billion.
Last month, Digitimes reported that Apple had yet to make a significant flash memory purchase in 2008, as it worked down through their existing inventory.
Tom Krazit writes about the ever-expanding world of Internet search, including Google, Yahoo, online advertising, and portals, as well as the evolution of mobile computing. He has written about traditional PC companies, chip manufacturers, and mobile computers, spending the last three years covering Apple. E-mail Tom. 
state starts to influence decisions of businesses. In case you
hadn't noticed, 96% of Americans pay their mortgages on time,
we have a decently low national unemployment rate (which
doesn't necessarily reflect the true chronically unemployed
numbers) of less than 4.5%, and people are still buying.
Certainly, since Dems have taken over congress there have been
madates that effect market swings that drive up the prices of oil
and food, but people still by these items. Did we forget that
while other tech companies weren't doing so hot, Apple was
charging on with consistent and growing sales numbers? So
growth slows for them a bit. Big deal. Notebook sales form them
are SURGING.
Right now, we're approaching a very MILD depressions, if that. If
we want to avoid it, we'll have to work AGAINST it, not just try to
ride it out. Apple is obviously one of the few companies in the
tech sector that can hold strong, especailly if Mossy is anywhere
close to being right.
on misinformation. How can this be a case of Apple cutting an
order when further on in the article you specifically say that the
figure of 200m is based on iSupply's expectations? Did Apple
say it was going to spend 1.6 billion? No. Both the 1.6 billion
figure and the 1.4 billion figure are guessed estimates - why not
try writing the story when you've got some hard figures, then it
might not end up with so many cross outs and corrections like
your 20th February one did.
iSuppli didn't pull those numbers out of nowhere, they work closely with flash memory companies in Asia, and those companies (Samsung, Hynix, etc.) surely knew what Apple was going to spend, and now will be spending.
The reason prices are dropping so sharply is because the memory companies all planned for higher capacity than they are now seeing. Maybe they should have seen it coming, but the entire industry missed the drop-off in demand, not just one or two companies. That says to me that Apple signaled to its partners that it would purchase X amount of flash and wound up purchasing X minus 2.
But the article didn't bother to state all the facts, in favor of reporting FUD.
would be a report that software sales for Macs had declined that
quarter - based on estimated results. This always made headline
news. Then, a month later, the actual figures were in and Mac
software sales had actually grown. This was buried in the fine
print. The next quarter, they repeated the process - using the
new estimate to compare with the actuals from the previous
quarter to 'show' that Mac software sales were declining, when
in fact they were increasing. It happened for 12 straight quarters
at one point (it was documented at the time in my web site,
which is no longer active).
Basically, the press has a vendetta against Apple and is happy to
publish anything that they can distort to make it look bad for
Apple.
- how much did flash prices fall?...
- by glen engelmann April 13, 2008 4:05 PM PDT
- even with "crashing" flash memory prices apple's spending is
- Like this Reply to this comment
-
(10 Comments)anticipated to increase 12%...
if demand was falling for apple products (as implied strongly in
the story) then wouldn't apple be spending less?
so... the product apple is buying costs way less and yet apple is
spending way more... to me that is a clear sign that demand for
apple products is soaring AND they are making more profit ....
since their costs for parts are lower....
thanks for the good news.... next time it might be nice if you
actually said it was good news though....