How much NAND capacity will the impending flash based iPod video actually utilize? Not enough to worry.

Implications: 1. 16GB of NAND in an iPod video will be very costly at this time. September will not be extremely different. 2. What effect on WW supply will this have? 3. Will this cannibalize iPhone sales amongst certain users, thus leaving more flash on the market? 4. Is this article simply another overreaction to the Samsung power outage?

Analysis: Very opportune time for publication of this article, immediately after Samsung experienced a hiccup in production and after iPhone sales/activations were not as rosy as expected. Component makers would be very excited if prices and supply were affected by market tightening, as they benefit from this, and are in pain during times of oversupply. This is a good enough reason for them to remain bullish even through uncertain times.  With the current 8GB iPhone commanding a price of $600, to whom exactly does Apple plan on marketing a 16GB iPod to and what will the cost be? If the release is anytime in the near future, expect the price to be extremely high.

The fact that the article contradicts its own thesis in the last paragraph by stating (which I believe to be factual) and conceding that tight supply is expected to ease by mid-September, although I anticipate that happening a bit sooner, really confuses me. Samsung, although responsible for a huge percentage of WW NAND supply, is not the only manufacturer out there.

Bottom line is Apple needs flash component pricing to decrease before the release of their 16GB video iPod, if that is the true capacity they will be releasing. They need this to continue to make their margins and produce a product affordable by the masses.