Apple scrambling to secure more NAND flash ahead of iPhone
An existing $1.25 billion dollar arrangement between Apple and the world's largest memory makers was designed to secure the iPod maker an ample supply of NAND flash memory through 2010, but Apple is now reported to be asking for even more chips ahead of iPhone.
Taiwan-based DigiTimes, which wavers in accuracy but has recently nailed a scoop or two, is reporting that Apple has been in talks with Samsung for the purchase of a volume of NAND flash to be used in all iPods and iPhones from June to year-end.
The report cites "sources" in saying Apple is asking for 400 - 500 million 4Gbit NAND flash equivalent chips, which is approximately 10 to 15 percent more than the two firms had agreed upon earlier.
Back in Nov. of 2005, Apple formed long-term supply agreements with Samsung, as well as Hynix, Intel, Micron and Toshiba, to assure that it would maintain ample supplies of NAND flash memory through calendar year 2010. As part of the deal, Apple prepaid each manufacturer $250 million, for a total of $1.25 billion.
According to DigiTimes, Samsung is not 100 percent sure its capacity can meet Apple's revised orders. The South Korea-based semiconductor firm is similarly concerned that an oversupply for NAND flash chips may occur if the sales of iPod and iPhone products are not as strong as expected.
According to the report, Apple has also requested that Hynix increases its supply of NAND flash for the third quarter. Hynix, however, is said to be struggling to meet existing demand as it stands.
Word of Apple's request comes just weeks before Apple chief operating officer Tim Cook is expected to sign off on the initial manufacturing ramp for the company's first mobile handset. The iPhone device will be available in both 4GB and 8GB capacities, retailing for $499 and $599, respectively.
Apple has asserted that it hopes to snag about 1 percent of the approximate 1 billion-unit global mobile handset market through 2008, which would translate into the sale of about 10 million iPhones over the next 18 months.
For their part, most analysts on Wall Street appear somewhat skeptical of the aggressive sales goal and have been modeling conservatively for the company to sell only several hundred thousand units between June and year's end. That would leave Apple just 12 months to meet the greater portion of its sales target.
Renewed talks between Apple and NAND flash suppliers may imply that Apple's aspirations for iPhone sales are now exceeding even its own self-imposed benchmark for success.
Taiwan-based DigiTimes, which wavers in accuracy but has recently nailed a scoop or two, is reporting that Apple has been in talks with Samsung for the purchase of a volume of NAND flash to be used in all iPods and iPhones from June to year-end.
The report cites "sources" in saying Apple is asking for 400 - 500 million 4Gbit NAND flash equivalent chips, which is approximately 10 to 15 percent more than the two firms had agreed upon earlier.
Back in Nov. of 2005, Apple formed long-term supply agreements with Samsung, as well as Hynix, Intel, Micron and Toshiba, to assure that it would maintain ample supplies of NAND flash memory through calendar year 2010. As part of the deal, Apple prepaid each manufacturer $250 million, for a total of $1.25 billion.
According to DigiTimes, Samsung is not 100 percent sure its capacity can meet Apple's revised orders. The South Korea-based semiconductor firm is similarly concerned that an oversupply for NAND flash chips may occur if the sales of iPod and iPhone products are not as strong as expected.
According to the report, Apple has also requested that Hynix increases its supply of NAND flash for the third quarter. Hynix, however, is said to be struggling to meet existing demand as it stands.
Word of Apple's request comes just weeks before Apple chief operating officer Tim Cook is expected to sign off on the initial manufacturing ramp for the company's first mobile handset. The iPhone device will be available in both 4GB and 8GB capacities, retailing for $499 and $599, respectively.
Apple has asserted that it hopes to snag about 1 percent of the approximate 1 billion-unit global mobile handset market through 2008, which would translate into the sale of about 10 million iPhones over the next 18 months.
For their part, most analysts on Wall Street appear somewhat skeptical of the aggressive sales goal and have been modeling conservatively for the company to sell only several hundred thousand units between June and year's end. That would leave Apple just 12 months to meet the greater portion of its sales target.
Renewed talks between Apple and NAND flash suppliers may imply that Apple's aspirations for iPhone sales are now exceeding even its own self-imposed benchmark for success.
Comments
An existing $1.25 billion dollar arrangement between Apple and the world's largest memory makers was designed to secure the iPod maker an ample supply of NAND flash memory through 2010, but Apple is now reported to be asking for even more chips ahead of iPhone.
Taiwan-based DigiTimes, which wavers in accuracy but has recently nailed a scoop or two, is reporting that Apple has been in talks with Samsung for the purchase of a volume of NAND flash to be used in all iPods and iPhones from June to year-end.
The report cites "sources" in saying Apple is asking for 400 - 500 million 4Gbit NAND flash equivalent chips, which is approximately 10 to 15 percent more than the two firms had agreed upon earlier.
Back in Nov. of 2005, Apple formed long-term supply agreements with Samsung, as well as Hynix, Intel, Micron and Toshiba, to assure that it would maintain ample supplies of NAND flash memory through calendar year 2010. As part of the deal, Apple prepaid each manufacturer $250 million, for a total of $1.25 billion.
According to DigiTimes, Samsung is not 100 percent sure its capacity can meet Apple's revised orders. The South Korea-based semiconductor firm is similarly concerned that an oversupply for NAND flash chips may occur if the sales of iPod and iPhone products are not as strong as expected.
According to the report, Apple has also requested that Hynix increases its supply of NAND flash for the third quarter. Hynix, however, is said to be struggling to meet existing demand as it stands.
Word of Apple's request comes just weeks before Apple chief operating officer Tim Cook is expected to sign off on the initial manufacturing ramp for the company's first mobile handset. The iPhone device will be available in both 4GB and 8GB capacities, retailing for $499 and $599, respectively.
Apple has asserted that it hopes to snag about 1 percent of the approximate 1 billion-unit global mobile handset market through 2008, which would translate into the sale of about 10 million iPhones over the next 18 months.
For their part, most analysts on Wall Street appear somewhat skeptical of the aggressive sales goal and have been modeling conservatively for the company to sell only several hundred thousand units between June and year's end. That would leave Apple just 12 months to meet the greater portion of its sales target.
Renewed talks between Apple and NAND flash suppliers may imply that Apple's aspirations for iPhone sales are now exceeding even its own self-imposed benchmark for success.
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In short: "People phreakin' are dying to buy an iPhone.... I mean seriously."
In short: "People phreakin' are dying to buy an iPhone.... I mean seriously."
But the ANALysts think the opposite...
Q3 - 10 million iPods, 15 million 4GB chips
Q4 - 50 million iPods, 75 million 4GB chips
+ 10 million iPhones, 15 million 4GB chips
------------------------------------------------
105 million 4GB chips
Even if that's conservative and they do 2x that, we're still barely at the halfway point for this order.
To get to 400-500 million, wouldn't that have to be confirmation of HD iPods going away (8x + chips per iPod) and/or NAND integrated in Macs by year end if not much closer to the June time frame?
The report cites "sources" in saying Apple is asking for 400 - 500 million 4Gbit NAND flash equivalent chips, which is approximately 10 to 15 percent more than the two firms had agreed upon earlier.
What the fuzz?
To me that shouts Nand flash iMac's. Come standard with 4GB Nand flash built-in.
I predict that Apple will sell 1M iPhones in just under 40 days. I'm taking bets.
I actually think you're right. However when it hits Europe, Australia and Asia, that's when the big numbers will be ringing in.
Even if that's conservative and they do 2x that, we're still barely at the halfway point for this order.
To get to 400-500 million, wouldn't that have to be confirmation of HD iPods going away (8x + chips per iPod) and/or NAND integrated in Macs by year end if not much closer to the June time frame?
It sure seems like it, doesn't it?
Perhaps low-end, even yet slimmer full iPods will move to flash RAM (multiple 4GB chips) , and "the real video iPod" --$399+ high-end iPods running OS X Mini and with 3.5" touchscreens -- will stick with HDD.
To get to 400-500 million, wouldn't that have to be confirmation of HD iPods going away (8x + chips per iPod) and/or NAND integrated in Macs by year end if not much closer to the June time frame?
Ah, but, you seem to miss the bit about 400-500 million Gbit chips. Each 4 Gbyte iPod would require 8 chips (each byte is 8 bits) to get 4 GB
But, at the same time...
Aren't 4-8 GB iPods already using 2+ GB chips, not 8 or more .5 GB chips... why would they be using .5 GB chips when they are using 2+ GB chips now? Either there is a typo of some kind (They do say the equivalent, so maybe...) or that number could actually be too small.
Change my example. Say it's only 50 million total devices (40 million iPod -- 10 next quarter, 30 Holiday quarter + 10 million iPhones) with just 4GB capacity (accounting for shuffles but ignoring 8GB iPod nanos and iPhones). That would be 200 million GBs which would be 400 million 4Gb chips.
I mean, I suppose, that could be accurate, but that would mean no capacity upgrade thoughout the year in my mind? I don't see why the manufacturers would be concerned about Apple's ability to need that capacity... That seems rather constrained.
Despite my initial optimism, I'm now led to believe there'll be no capacity upgrade across the line of Flash-based iPods for the rest of the year? Hmmm.... Potentially disappointing. Well, I guess Apple is hitting the memory manufacturers capacity already.
2) The iPod Video will NOT be NAND. HDDs are not so unreliable that that it warrants a highly increased cost with a severely reduced capacity. (e.g.: Per Engadget, Dell will replace your notebook's HDD with a measly 32GB NAND drive for $549 MORE THAN the standard HDD)
1) Am I the only who thinks the 400-500M 4GByte NANDs is the order through 2010, not through 2007? The Digitimes article is quoting sources who state "Gbit", but I think it's a typo as I've never seen HDD or NAND capacity listed as anything other than BASE-10 bytes.
No, I think the report is accurate as DigiTimes ever will be.
"Samsung Electronics and Apple have been in talks recently at Samsung's headquarters in South Korea for the purchase of a volume of NAND flash, with the chips to be purchased covering those to be used in all iPods and iPhones from June to year-end 2007, according to sources.
Apple is asking for 400-500 million 4Gbit NAND flash equivalent chips from Samsung, the sources said."
The Gbit unit is often used... its the de facto unit really (for the manufacturers at least); I just let it slip my mind.
Or maybe the iPhones will actually be 8GB and 16GB by the time they ship in June.
I predict that Apple will sell 1M iPhones in just under 40 days. I'm taking bets.
That would be interesting because it would mean that they have capacity to build that many, which would mean that there would be tremendous excess capacity shortly after that period of time.
The Gbit unit is often used... its the de facto unit really (for the manufacturers at least); I just let it slip my mind.
I am thinking of the marketing side of things.
Change my example. Say it's only 50 million total devices (40 million iPod -- 10 next quarter, 30 Holiday quarter + 10 million iPhones) with just 4GB capacity (accounting for shuffles but ignoring 8GB iPod nanos and iPhones). That would be 200 million GBs which would be 400 million 4Gb chips.
Just to confirm your math: 400MGb ÷ 8 = 50GB, a realistic number for the year.
That would be interesting because it would mean that they have capacity to build that many, which would mean that there would be tremendous excess capacity shortly after that period of time.
Apple has done well to keep supplies pretty well stocked that last 18 months or so, but I'm expecting an iPhone shortage. Something akin to the 1G iPod Mini shortage a few years past.
Is there any word if the mom and pop Cingular resellers will be getting the iPbone? I'm guessing that any constraints will first affect Cingular stores, which, I assume, will only get a limited supply of the phones compared to the Apple Stores, which should be well stocked.
I am thinking of the marketing side of things.
Just to confirm your math: 400MGb ÷ 8 = 50GB, a realistic number for the year.
DigiTimes reports on Asian manufacturers. It makes sense.
That's roughly my math. My revisions (to my own math and yours) would be: That 50 million GBs will probably be spread over 30 million devices... I know Steve says 10 million iPhones by the end of '08, but I see that happening over the Holiday; let's take 60% of that number or 6 million. I see another 10 million iPods next quarter and probably another 30 during the Holiday (assuming an upgrade at some point); 60% of those are Flash based. So that 50 million GB needs to be divided up between 30 million devices? The iPhone might be very constrained or iPods aren't getting updated any time soon. And that's using what I consider fairly reasonable estimates. Even if Apple only sells 15 million Flash-based iPods and iPhones for the rest of the year (which is absurd) that 50 million seems quite constraining.
Ireland, I like the typefaces on the "advertisehereforever" site. Do you know what they are called and if they are available somewhere?
I'm glad to hear you like them. The "Coming soon.." part is PR8 Charade, I think I bought that on dafont. And the other font is LHFSplash Regular, I got that one on My Fonts.
The next iMacs, MacBooks & MBPs may use Robson caching, which is supposed to speed up access to often-read files. The next nanos may have another doubling of capacity. There's the iPhone, which I hope doubles the capacity in fairly short order. There may be a low end iPod video with flash, while keeping the high end with a hard drive for huge mass storage. AppleTV may transition to flash in a year, the hard drive was probably cheaper for decent local storage at the moment. A little less likely, but if there's an ultraportable coming, then it might use flash as primary storage.
BTW: the usual convention for stating memory capacity is that a bare memory chip is rated in bits for storage. Solder it to a board and the board is rated in bytes. I don't think I've seen this done any other way, the few times I've seen it is usually an error made by someone that's not in that industry and don't know what they are talking about.