Apple buying up available flash RAM supplies for next iPhone
A report issued on the flash RAM market indicates that Apple is inhaling supplies of memory components in preparation for the next generation iPhone, causing part shortages and raising the spot price for memory.
The ThinkEquity Partners' report centered on SanDisk, which is not one of the four companies Apple actually buys its memory components from (Samsung, Hynix, Toshiba, and Micron). However, the report says Apple's voracious appetite for flash RAM is affecting the entire market.
The iPhone maker has bought out Samsung's entire available supply, putting the world's largest producer of flash memory on allocation until April 2009, according to the report. Samsung makes just over 40% of the world's NAND Flash RAM.
ThinkEquity also said that it believes Hynix and Toshiba are also "under NAND supply constraints as Apple ramps NAND demand for its next-generation iPhones." However, both companies are facing technical difficulties that are leaving Apple's RAM supplies constrained.
Apple and the NAND flash RAM market
The report cited surging short term spot prices for 8Gb and 16Gb components, although the higher component prices as noted in the report relate to lower-end parts that memory manufacturers are phasing out, causing the price for those parts to rise as their supply fades.
Apple primarily buys higher capacity 64Gb and 128Gb parts (128Gb is 16GB). The company also maintains long term volume contracts for flash RAM components, isolating it from temporary fluctuations in the spot market.
Apple's position in selling tens of millions of iPods gives it the ability to cherry pick components at prices many competitors can't match. Apple has specifically noted favorable component pricing as a key factor in the company's profitability over the last several quarters.
The volatile non-volatile RAM market
Last year, iSuppli reported that Apple had become the world's largest OEM buyer of NAND flash memory, buying $1.2 billion worth of parts for its iPods and the iPhone in 2007, over 13% of global production.
The demand for ever greater storage, combined with NAND's relative simplicity, has resulted in rapid technological progress in delivering ever larger parts with regularly falling prices. Average selling prices of NAND flash fell 63% in 2008, and that came on top of rapid declines in flash prices over the previous two years that caused some manufacturers to shift production to other more profitable types of memory, such as DRAM. Sales revenues in the NAND market fell from $13.4 billion in 2007 to $11.4 billion in 2008.
After iSuppli issued its warning a year ago this month that said Apple had deeply cut its demand for Flash RAM, Samsung reduced its capacity in April and May. Large new orders from Apple for the iPhone 3G then ate up most of Samsung's available production, causing the company to reduce the supply to other manufacturers, according to a report in DigiTimes.
The RAM hungry iPhone
Apple has historically put more RAM capacity in its iPhone than other smartphone vendors. The original model offered 4 or 8GB at a time when virtually no other smartphones gave users more than 128MB, then the typical high-end limit for many mobile operating systems.
Even so, Apple found that its customers were only buying the 8GB model, resulting in a quick drop of the 4GB version and the introduction of a new 16GB iPhone within a few months. Apple also packs 32GB into the high end iPod touch.
Apple's emphasis on iTunes-integrated music and videos for the iPhone, including full length movie playback, also resulted in a device equipped to store lots of mobile applications with a level of sophistication well above that of most smartphones. Other phone manufacturers are now following Apple's lead in packing phones with multiple gigabytes of flash storage.
Finding enough flash RAM supply may become more difficult as Apple continues to eats up an increasing volume of the world's supply of memory parts, even as the global economy cools and production is cut back.
The ThinkEquity Partners' report centered on SanDisk, which is not one of the four companies Apple actually buys its memory components from (Samsung, Hynix, Toshiba, and Micron). However, the report says Apple's voracious appetite for flash RAM is affecting the entire market.
The iPhone maker has bought out Samsung's entire available supply, putting the world's largest producer of flash memory on allocation until April 2009, according to the report. Samsung makes just over 40% of the world's NAND Flash RAM.
ThinkEquity also said that it believes Hynix and Toshiba are also "under NAND supply constraints as Apple ramps NAND demand for its next-generation iPhones." However, both companies are facing technical difficulties that are leaving Apple's RAM supplies constrained.
Apple and the NAND flash RAM market
The report cited surging short term spot prices for 8Gb and 16Gb components, although the higher component prices as noted in the report relate to lower-end parts that memory manufacturers are phasing out, causing the price for those parts to rise as their supply fades.
Apple primarily buys higher capacity 64Gb and 128Gb parts (128Gb is 16GB). The company also maintains long term volume contracts for flash RAM components, isolating it from temporary fluctuations in the spot market.
Apple's position in selling tens of millions of iPods gives it the ability to cherry pick components at prices many competitors can't match. Apple has specifically noted favorable component pricing as a key factor in the company's profitability over the last several quarters.
The volatile non-volatile RAM market
Last year, iSuppli reported that Apple had become the world's largest OEM buyer of NAND flash memory, buying $1.2 billion worth of parts for its iPods and the iPhone in 2007, over 13% of global production.
The demand for ever greater storage, combined with NAND's relative simplicity, has resulted in rapid technological progress in delivering ever larger parts with regularly falling prices. Average selling prices of NAND flash fell 63% in 2008, and that came on top of rapid declines in flash prices over the previous two years that caused some manufacturers to shift production to other more profitable types of memory, such as DRAM. Sales revenues in the NAND market fell from $13.4 billion in 2007 to $11.4 billion in 2008.
After iSuppli issued its warning a year ago this month that said Apple had deeply cut its demand for Flash RAM, Samsung reduced its capacity in April and May. Large new orders from Apple for the iPhone 3G then ate up most of Samsung's available production, causing the company to reduce the supply to other manufacturers, according to a report in DigiTimes.
The RAM hungry iPhone
Apple has historically put more RAM capacity in its iPhone than other smartphone vendors. The original model offered 4 or 8GB at a time when virtually no other smartphones gave users more than 128MB, then the typical high-end limit for many mobile operating systems.
Even so, Apple found that its customers were only buying the 8GB model, resulting in a quick drop of the 4GB version and the introduction of a new 16GB iPhone within a few months. Apple also packs 32GB into the high end iPod touch.
Apple's emphasis on iTunes-integrated music and videos for the iPhone, including full length movie playback, also resulted in a device equipped to store lots of mobile applications with a level of sophistication well above that of most smartphones. Other phone manufacturers are now following Apple's lead in packing phones with multiple gigabytes of flash storage.
Finding enough flash RAM supply may become more difficult as Apple continues to eats up an increasing volume of the world's supply of memory parts, even as the global economy cools and production is cut back.
Comments
A Gazilion TB
Thats awesome. haha. Apple consumes alot of memory i wonder if we put all the memory apple has ever bought together what the size of the memory would be
A Gazilion TB
And yet this forum still gets a gazillon posts that the devices don't have enough capacity and unrealistic expectations of doubling device capcity every 6 months.
And yet this forum still gets a gazillon posts that the devices don't have enough capacity and unrealistic expectations of doubling device capcity every 6 months.
Hahah well those posts aren`t coming from me. Im still using a one gig iPod nano. and I have about 30 songs on it haha
And yet this forum still gets a gazillon posts that the devices don't have enough capacity and unrealistic expectations of doubling device capcity every 6 months.
More like every 12 months? It's been that way since 2005.
Why technically correct (random access memory), who the hell uses the term "Flash RAM" (or would ever use the confusing phrase "RAM hungry iPhone"). OBVIOUSLY you are only going to confuse your readers who associate the term "RAM" with high-speed SDRAM memory and NOT flash storage memory. Just call it Flash memory like the rest of the freakin' world..
I Agree. I was a bit confused when reading it myself. I was excited to read the title of the article when I saw "RAM" as I thought that could mean a "RAM" boost from 128 to maybe 256 or something. Kind of a dissapointing read really, does it say anywhere in there they are buying up 32gb capacity flash RAM for the iPhone? Well then who really cares if they bought up most of the 8 and 16gb? I don't.
Not really solely to do with the iPhone but I suppose if you want to create a headline it's one way to do it.
I Agree. I was a bit confused when reading it myself. I was excited to read the title of the article when I saw "RAM" as I thought that could mean a "RAM" boost from 128 to maybe 256 or something.
Ditto. Although flash memory is random access in terms of read and write, it cannot be deleted randomly (only a block at a time). For this reason and more, it should be called "flash memory" not "flash RAM".
Although additional flash memory capacity is surely appreciated, I would like additional RAM as well. Older and current iPhone models are equipped with 128MB RAM, which really isn't enough. Many apps need more and I am pretty sick of Safari continuously reloading the page due to tiny RAM cache amount.
Because it is becoming very obvious that most Apple website have little or NO technical knowledge.
Flash as RAM ?
And this is not the first time either.
Or to put it differently: is Apple gobbling up all those chips merely for the next iPhones/iPods or can we expect some other device with built-in SSD (tablet or netbook anyone?) as opposed to flash chips directly soldered onto the motherboard.
Hopefully Appleinsider can implement better tecnical editing in the future. Otherwise people will loose interest in the web site as it stumbles like this more and more.
Dave
I hope most Apple website dont get viewed by PC tech savy users.
Because it is becoming very obvious that most Apple website have little or NO technical knowledge.
Flash as RAM ?
And this is not the first time either.
Gosh, you're right...but its also a tidbit of nomenclature semantics technical minutia that is utterly ignoring the bigger picture being reported.
Looking at the bigger picture, the suggestion is being made that Apple is ramping up for a new product release, and/or some sort of bump in "memory capacity".
However, it also points out that NAND production was cut back on anticipation of significantly lower demand, so it doesn't appear to be particularly clear if Apple's true demand is up, or has merely not been cut (or cut by as much as the suppliers were expecting).
For example, consider the numbers reported:
For $1.2B to be 13% of global production, this means that the total was = $1.2/0.13 = $9.2B
But... Hmmm...where's our calculated value of $9.2B?
And since the first number was supposed to represent 2007, there's a mere $4B discrepancy (over 30% mismatch) that you guys have overlooked while arguing over the semantics of the component's name.
FWIW, what I see are production-centric numbers that don't seem to make any sense against what was being supposedly reported.
-hh
I take this as another example of Appleinsider writers that simply don't have a clue. Flash is a ROM technology not a RAM technology. This due to writes requiring very specific steps to be taken to program the cells. More so some flash technologies aren't even random at the byte level.
Hopefully Appleinsider can implement better tecnical editing in the future. Otherwise people will loose interest in the web site as it stumbles like this more and more.
Dave
And declaring flash memory to be ROM (Read Only Memory) clears this up how?
Apple uses the same chips in the iPod nano, the touch and the iPhone. Nano sales have been huge over the holiday period and are more likely the reason why apple has been securing more stocks.
Not really solely to do with the iPhone but I suppose if you want to create a headline it's one way to do it.
?? I know- WTF?? The Touch has larger memory flash than the iPhone already and will probably be the first to get 64G especially once it hopefully gets a camera.
It's all about the iPhone on here- as if?
deleted
I hope most Apple website dont get viewed by PC tech savy users.
Because it is becoming very obvious that most Apple website have little or NO technical knowledge.
Flash as RAM ?
And this is not the first time either.
I thought so too- I've seen this before on here as well. Oh well, I guess nobody's perfect.
And declaring flash memory to be ROM (Read Only Memory) clears this up how?
Historically, Flash is an evolutionary step beyond EEPROM (Electrically Erasable and Programmable Read Only Memory), and that acronym actually does a fairly good job of describing the processes at play in Flash memory.
It certainly isn't strictly Random Access Memory in the traditional sense of the term due to the fact that the process to write it (and to a lesser extent, sometimes even to read it) is not truly random.
A neutral term, like Flash memory or Flash storage, could probably be used to silence whiners on both sides.
For the record, all of the devices Apple has released to date which employ the iPhone OS have been equipped with something more like 128 MB of RAM, and with several gigs of Flash acting as a mass storage/hard drive replacement.
People are funny. They say it's not RAM because it's a certain type of RAM. That's like saying pepperoni pizza isn't pizza cause they put pepperonis on it. If you're mad because they weren't overly specific, get over it. Most people don't know what NVRAM is compared to RAM.
On another point. Why doesn't the iPhone/iPod use virtual (System) RAM. It seems to make sense to me that I could somehow use part of that 2gb I haven't used for music, video, etc. for a system RAM extension.
Using the term NVRAM to include technologies such as EEPROM and Flash is a neologism.
Flash is not Random Access when writing, therefore it is not RAM. (Notice the meaning of the first two letters in the acronym?) Simple enough for you?
By the way, the iPhone/iPod touch does use Virtual Memory, in that every running process is executed in its own virtual address space, and different portions of each virtual address space can be mapped to various different ares of physical memory. It does not use swap files or swap partitions or any other form of swap, hence the Flash is not accessible as a form of System RAM extension.