Survey: Thanks to iPhone, global revenue for NAND flash for smartphones will near $1 billion by 2013

Written on 2:36 AM by Mujtaba

Thanks to Apple’s iPhone, smartphones will account for nearly one third of all mobile phones sold in 2013, says a new research note by iSuppli. The research firm attributed an estimated sixfold increase in NAND demand between 2008 and 2013 to Apple’s handset, estimating global revenue from sales of NAND chips for mobile phones to reach nearly $1 billion by 2013.

The report estimated a sixfold-rise in global NAND demand between 2008 and 2013, generating nearly $1 billion in revenue. Much of the growth in demand for NAND chips and smartphones is being credited to Apple’s iPhone. Michael Yang, senior analyst for mobile and emerging memories at iSuppli, said that NAND flash makers can “thank Apple for starting this trend,” adding that the iPhone “injected new life into the memory market.”

The iPhone success has put handset makers on high alert, resulting in an influx of devices that are adding to the demand, namely Palm Pre, the BlackBerry Storm, and Android-powered smartphones like the T-Mobile G1, all with 8GB of storage. iSuppli said that the average amount of NAND flash in all mobile phones shipped worldwide will rise to 5.8Gbytes per handset in 2013, up from less than 1Gbyte in 2008.

Last year, NAND revenue reached $166.5 million, and $284.3 million in revenue is projected for 2009. By 2013, revenue from sales of NAND chips for mobile phones will rise to $932.5 million. The figure is equal to a 41.1 percent Compound Annual Growth Rate, more than three times higher than the 12.2 percent increase during the same period for the overall NAND flash market. This clearly indicates that smartphones are growing at a much faster pace than the overall wireless handset segment.

The research firm predicted that smartphones will account for nearly one third (26.4 percent) of all mobile phone units sold in 2013, twice as much over the 13.1 percent in 2008.

Christian’s Opinion

Apple uses NAND chips in its iPhone 3G (8GB) iPhone 3GS (16GB and 32GB) and iPod touch (8GB, 16GB, and 32GB). According to the , the company could soon add a new 8GB iPhone 3GS model to the mix.

According to Apple’s latest earnings report, the company sold over 5.2 million iPhone 3G and 3GS units during the June quarter. Over 40 million iPhone and iPod touch units sold since July 2006 have certainly contributed a lot to the rise in NAND demand, but that’s peanuts with an uptick expected when Apple brings the iPhone to China sometime next year, opening up the 1.3 billion people market.

Apple has been successfully leveraging its dominant position to create artificial shortages of NAND chips. As a result, rival devices are unable to match Apple’s in terms of storage capacity and price points without eating into their own margins. Apple has recently to secure NAND output from Toshiba.

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