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New iPod expected to cause NAND Flash shortage, says Gartner |
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Jun 21, 2006 at 04:09 PM |
 NAND Flash based portable media players dominated by Apple's iPod range are continuing to see strong growth in 2006. Gartner has issued a new report that projects portable media players will reach 187.7 million units sold in 2006, up from 134.5 million units sold in 2005.
With NAND Flash based players responsible for 80 percent of units sold and the expected announcement by Apple of a 10GB to 12GB iPod, Gartner is now forecasting that there will be a 5.8 percent shortage of NAND flash supply in the fourth quarter of 2006 that will persist into the first quarter of 2007 with a 2.6 percent shortage.
"If a high-capacity NAND-based iPod is introduced, the severity of the allocation will intensify during the fourth quarter of this year, and our outlook of supply and demand for the first quarter of 2007 could become more severe than initially anticipated," stated Joseph Unsworth, principal research analyst for Gartner. "Pricing pressure from Apple also puts indirect pressure on competing consumer products, such as flash cards and USB flash drives, which are still the major drivers of the NAND flash market. All of these products compete for consumers' discretionary spending."
Unsworth noted that the shift in production from DRAM to NAND has had a positive effect on reducing the volatility of the DRAM cycles.
"If NAND flash demand intensifies in response to an aggressive announcement from Apple, then it is expected that several suppliers will move additional DRAM capacity over to NAND flash in an effort to gain market share and diversify their memory portfolios," Mr. Unsworth said. "If this scenario comes to fruition, the prospects for the DRAM market in 2006 and 2007 could be much better than anticipated."
Courtesy of Samsung.
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