Reports: Flash Media Market to Explode; Prices to Plummet
TMO Reports - Reports: Flash Media Market to Explode; Prices to Plummet
by , 10:00 AM EDT, April 5th, 2005
If you think the popularity of flash-based music players, like the Apple iPod shuffle, is big now, just wait a few years. A new report is predicting the flash media market will more than triple from US$5 billion last year to $18 billion in 2009. A similar report says prices will fall quickly this year due to an oversupply and that consumers will reap the benefits in lower prices.
The analysis concern In-Stat reported Tuesday that digital still cameras, USB flash drives, the growing digital music player market, and the promise of a large mobile phone market will continue to dominate the non-Flash card based demand, with USB memory being the largest of the group with revenues of a little over $2 Billion in 2005.
The report indicates most flash memory makers, like Samsung, are switching much of their production to NAND chips from NOR Flash. NAND and NOR Flash are both "nonvolatile" for their ability to retain data even when they lack a constant supply of power. The difference is that NAND is faster and stores more data. As a result, it is becoming the mostly widely used type of flash memory.
"The shift from NOR to NAND has changed the Flash competitive landscape," the In-Stat report said.
Samsung has become a pivotal player in NAND chips, having overtaken Intel for the number one position in the combined NAND-plus-NOR Flash market. Intel does not manufacture NAND Flash, where Samsung manufactures both kinds.
Companies that haven't switched more than 40% of their production from NOR to NAND Flash and a large percentage of their DRAM memory production are starting to do so now, a report from the analyst firm IDC said Monday. As supply grows, IDC predicts supply will stay up with demand and prices will start to plummet quickly -- as much as 56% for NAND Flash chips this year alone.
The losers in lower prices will be the manufactures, who will still make money, but at a more subdued pace through 2008. The winners will be manufacturers at least for a while try as they'll try and maintain pricing for as long as possible and reap bigger profits, the report indicated. But as competition among makers of products like MP3 players lower prices, prices of products will fall and consumers will find more capacity at cheaper prices going into the 2005 holiday season.
Observer Comments
All flash memory (NAND and NOR) is nonvolatile; flash memory would be pretty darn useless otherwise.
Here's a page that explains flash memory and the difference between NOR and NAND flash (which get their names from the type of transitor logic gates used:
http://www.answers.com/topic/flash-memory
Okay, I may not have had enough coffee today - someone please explain these two sentences in English:
<i>The losers in lower prices will be the manufactures, who will still make money, but at a more subdued pace through 2008.</i>
-- manufactuers will loose
<i>The winners will be manufacturers at least for a while try as they'll try and maintain pricing for as long as possible and reap bigger profits, the report indicated.</i>
-- manufacturers will win
huh?
QuoteGuest wrote:
Okay, I may not have had enough coffee today - someone please explain these two sentences in English:
<i>The losers in lower prices will be the manufactures, who will still make money, but at a more subdued pace through 2008.</i>
-- manufactuers will loose
<i>The winners will be manufacturers at least for a while try as they'll try and maintain pricing for as long as possible and reap bigger profits, the report indicated.</i>
-- manufacturers will win
huh?
The first sentence refers to flash memory manufacturers and the second refers to device manufacturers?
Such is the danger of recycling & condensing press releases and other sites' posts.
QuoteGuest wrote:
Okay, I may not have had enough coffee today - someone please explain these two sentences in English:
<i>The losers in lower prices will be the manufactures, who will still make money, but at a more subdued pace through 2008.</i>
-- manufactuers will loose
<i>The winners will be manufacturers at least for a while try as they'll try and maintain pricing for as long as possible and reap bigger profits, the report indicated.</i>
-- manufacturers will win
huh?
it is also possible that this is a convoluted way to say that in the near-term the manufacturers of flash chips will benefit from the large supply of flash that is being sold at current prices for a large profit. However, in the next few years this oversupply will, due to competition, drive the prices of flash down and the manufacturers will no longer enjoy the high profit margins that they are able to now.
In general the market goes like this:
1. New device/component introduced. Component manufacturers made little or even lost money when selling to device manufacturers. Device manufacturers made little money.
2. Device sold well. Both manufacturers made money.
3. Market expanded and competitors came in. Rapid drop in component and device prices. Device manufacturers squeeze component manufacturers. Device manufacturers will make more money than component manufacturers though profit margins dropped.
4. Oversupply of components. Most component manufacturers lost money. Device manufacturers made a little money.
5. Demand of devices stagnated. Most device manufacturers lost money.
PC industry is in stage 5. MP3 industry is in stage 2, going into stage 3.
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