by , 11:50 AM EST, March 7th, 2007

NAND Flash memory is likely to move beyond the iPod nano and shuffle in Apple's product line up and become the primary storage medium in other iPods and in a Mac-based subnotebook product, according to American Technology Research analyst Shaw Wu.

Flash memory prices are still relatively high compared to hard drive storage, which means that for now Apple's full-size video capable iPod will continue to rely on the same disk-based storage is has been using. As memory prices drop, however, that is likely to change.

Mr. Wu commented "Our sources indicate that while AAPL plans to migrate the rest of its iPod product line to NAND flash from [hard drives], fairly low price points ($249 and $349) and customer appetite for high storage capacities (30 GB, 80 GB and above) will likely prevent this from happening until late 2007-2008."

He added that it is unlikely that Apple will release a true widescreen video capable iPod until after the iPhone ships in June, but that the current models may see an increase in hard drive capacity.

A true widescreen iPod and a small form factor portable Mac are both products consumers have been clamoring for. By releasing a new Flash memory-based version of the video iPod later in the year, Apple can capitalize on pent up demand without cannibalizing potential iPhone sales.

Should vendors manage to drop prices enough, Mr. Wu feels Apple may introduce a new subnotebook form factor Mac in the second half of 2007. The subnotebook Mac would capitalize on the popularity of the MacBook and MacBook Pro, but rely on Flash RAM instead of a hard drive for primary storage.

Mr. Wu is maintaining his "Buy" rating and target price of US$115 for Apple stock. Apple is currently trading at $88.24, up 0.05 (0.06%).