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iSuppli: flash orders to drop 66% via Apple

updated 10:45 am EDT, Mon April 7, 2008

iSuppli Flash Order Drop

iSuppli today said it predicts a major drop in orders for NAND flash memory largely due to Apple. While the research group originally expected the value of orders to climb by 27 percent to peak at nearly $17.9 billion, it now estimates that growth to reach just $15.2 billion, or to grow by just a third at 9 percent. The overall drop is credited to reduced spending by US buyers unable to afford portable media players and other consumer electronics through defaults on subprime mortgages and the ripple effect it creates elsewhere in the world.

However, most of this is attributable to Apple as a benchmark, according to iSuppli. The company is the third-largest user of NAND flash for storage in its iPhones and iPods but has yet to make any large orders this year, suggesting that it doesn't expect a large spike in sales months later, as it did in 2007. Orders are still anticipated to increase overall but should reach $1.4 billion, or $400 million less than what Apple was initially expected to spend.

This comes in spite of new products from Apple that use flash memory. The optional solid-state drive for the MacBook Air "won't come close" to filling the gap, says the analyst group.

Suppliers are known to be cutting memory prices to compensate for overstock problems with hopes that Apple, SanDisk, Sony, and others will stock up on the cheaper memory in anticipation of the holidays this year.



By Electronista Staff
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  1. boulder1259

    Fresh-Faced Recruit

    Joined: May 2002

    0

    something's wrong here...

    Apple's sales are expected to be roughly the same as last year (with respect to flash based devices) and yet they are responsible for a 66% drop? Is this the new math that I always hear so much about?

    Sales 2008 = Sales 2007 = 66% drop?

  1. Hobeaux

    Junior Member

    Joined: Mar 2002

    0

    i suck at math

    perhaps this means that the exponential climb of purchases is expected to level off. you can still have a huge number of sales without doubling YoY.

  1. MeandmyMac

    Fresh-Faced Recruit

    Joined: Feb 2008

    0

    cheaper memory...

    "Suppliers are known to be cutting memory prices to compensate for overstock problems with hopes that Apple, SanDisk, Sony, and others will stock up on the cheaper memory in anticipation of the holidays this year."

    If Apple took advantage of the reduced pricing of the overstocked supplier of Flash memory, would Apple show "Good Karma" as Steve Jobs would say and pass those savings on to the consumer by reduced pricing?

  1. sporobolus

    Fresh-Faced Recruit

    Joined: Apr 2008

    0

    headline is nonsense

    it sounds more like growth will be 66% less than previously expected, not that overall orders will drop 66%; it seems impossible for ordinary people to actually view the citation on isuppli.com, so one has to trust that at least the body of the article is right

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: something's wrong

    It doesn't mean something is wrong. Even if Apple expects sales to match last year, they may have overestimated the amount of memory they needed last year, and ended up with a large warehouse of flash-based memory. If you've got a ton laying around, you don't need to buy more.

  1. Abbi

    Fresh-Faced Recruit

    Joined: Jun 2007

    0

    Doesn't Add Up

    If the 3G iPhone is to be expected within 60 days (per Walt Mossberg) and Apple has yet to place any Flash orders for 2008, what does that say about stock levels @ Apple? Did they really overbuy THAT much Flash last year that they are still stuck with them... I doubt their forecasting would be that off.

  1. Abbi

    Fresh-Faced Recruit

    Joined: Jun 2007

    0

    Doesn't Add Up

    If the 3G iPhone is to be expected within 60 days (per Walt Mossberg) and Apple has yet to place any Flash orders for 2008, what does that say about stock levels @ Apple? Did they really overbuy THAT much Flash last year that they are still stuck with them... I doubt their forecasting would be that off. So either Walt is wrong or iSuppli is wrong about Apple's ordering patterns. - Abbi Vakil

  1. Eldernorm

    Fresh-Faced Recruit

    Joined: Sep 2007

    0

    wise owl say:

    Maybe Apple is seeing the price of memory going down and before it jumps in and buys, it would like the price to drop just a little more. Less cost = more savings.

    Also, if Apple is the third buyer of memory, why is iSupply worrying about them??? What is happening with the #1 and #2 buyers of memory???

    Just stupid companies making stupid claims to get noticed. Also, maybe Apple has other suppliers or is ordering thru other channels so that the market does not know what its doing. Just a thought.

    en

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