Thanks in large part to Apple’s (AAPL) iPhone and the growing ranks of iPhone imitators, worldwide sales of NAND-type flash memory are expected to rise nearly six-fold from 2008 to 2013, according to a report by iSuppli Corp. issued Wednesday.
Global revenue from sales of NAND flash for mobile phones could hit $932.5 million in 2013, according to iSuppli, up from $166.5 million in 2008 — a compound annual growth rate of 41.1%.
“NAND flash makers can thank Apple Inc. for starting this trend, with its iPhone models injecting new life into the memory market,” writes Michael Yang, senior analyst for mobile and emerging memories at iSuppli. “However, with the introduction of the a new generation of ‘iPhone killers,’ multiple smartphone makers now are helping to drive NAND demand.”
Apple sold 5.2 million iPhones in its last fiscal quarter and is planning to introduce a version the phone in China. “This,” says Yang, “will open up the market for the iPhone to a new potential audience of 1.3 billion people.”
Yang also credits Apple with raising the bar for how much memory manufacturers are expected to pack into their smartphones.
“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. He points out that the entry level iPhones in 2007 had 4 GB of NAND. Today, the entry level iPhone 3GS have four times that capacity, and the 32 GB model has increased it eightfold.
The smartphones he calls the “iPhone killers” — the Palm (PALM) Pre, the BlackBerry (RIMM) Storm and the GI running Google’s (GOOG) Android OS — all come with 8 GB of NAND. Some come with more; the Nokia (NOK) N7, for example, packs 32 GB.
He predicts that the average mobile phone in four years will have 5.8 GB of NAND flash built in, up from less than 1 GB in 2008.
NAND flash is an especially dense from of non-volatile memory. It was introduced by Toshiba more than 20 years ago and is widely used today in memory cards and USB drives, as well as mobile phones.
Apple COO Tim Cook announced on July 21 that Apple had made a $500 million prepayment to Toshiba as part of a long-term agreement to supply Cupertino with flash memory. “We view flash as a very key component for us because we use it in so many of our products,” he told analysts during Apple’s Q3 earnings call, “and also we’re a reasonable percentage of users of flash on a worldwide basis.”
