The Mac Observer

Skip navigational links

You're viewing an article in TMO's historic archive vault. Here, we've preserved the comments and how the site looked along with the article. Use this link to view the article on our current site:
Analyst: Apple Insulated from NAND Flash Price Increases

Analyst: Apple Insulated from NAND Flash Price Increases

by , 8:45 AM EDT, July 12th, 2007

NAND Flash component pricing seems to have stabilized recently, which means companies can't count on dropping prices to help keep production costs down. Apple, however, is fairly well insulated from the change thanks to its practice of signing multi-quarter contracts for the memory used in the iPod nano, iPod shuffle, and iPhone, according to Piper Jaffray analyst Gene Munster.

"The vast majority of Apple's NAND flash buying is through multi-quarter contracts and is not impacted by changes in spot pricing," he said. "Apple has likely locked into contract pricing on NAND flash with Samsung for the next several quarters and, therefore, would be insulated from the recent changes."

Apple's deals with memory manufacturers also means that the company is more likely to be able to maintain a supply for product manufacturing -- something that some of its competitors may not be able to manage heading into the holiday buying season. Although Apple has been able to keep iPhones in only about half its stores, it is able to maintain a steady supply, and thanks to its buying practices will be in a better position to try to maintain that supply through the end of the year.

Looking forward, Mr. Munster expects that Apple will be releasing new iPod models that, like the iPhone, run OS X and include a touch screen interface. Mr. Munster commented "While Apple has been criticized for diversifying its product lineup, we believe Apple is focusing its offerings on the OS X software, which is used in Macs, Apple TVs, iPhones, and soon, iPods."

Mr. Munster is maintaining his "Outperform" rating and US$160 target price for Apple's stock. Apple is currently trading in the pre-market at $133.15, up 0.76 (0.57%).


If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.

  

Recent Headlines - Updated October 25th

Fri,5:07 PM
New Uses For Old Power Macs
5:02 PM
Apple Pay is Soaring While Competitors Crash and Burn
1:47 PM
The Camera Lens Mug: $19.99
1:19 PM
TMO Daily Observations: 2014-10-24
11:10 AM
Apple, Nike Teaming Up on Wearable Tech Project
9:37 AM
Kickstarter Project: Mouse Guard LEGO Mini Figures
8:48 AM
OS X Yosemite: Handing Calls Off to Your iPhone
Thu,8:46 PM
Yosemite: How To Fix Safari’s Address Bar
7:32 PM
If Microsoft Made a Smart Watch…
5:45 PM
X-Doria Folio Case for iPhone 6: Awkward by Nature
5:30 PM
ACM 277: Apple Pay, Apple Designs, and iPad as a Laptop Replacement
4:34 PM
Learn Apple’s Swift Programming Language for $19
  • __________
  • Buy Stuff, Support TMO!
  • Podcast: Mac Geek Gab
  • Podcast: Apple Weekly Report
  • TMO on Twitter!