True, but other cell phone manufacturers and impending SSD adoption should not be discounted

Implications: 1. I agree that Apple is currently receiving a large portion of NAND (32Gb and 64Gb) from certain semis, but other cell phone manufacturers are starting to load more NAND into their handsets. 2. 50%+ of new cell phones sold will have a NAND expansion slot (MicroSD typically) for music, video, games, photos, etc. 3. High capacity SSD adoption will be hindered by current increasing flash prices. 3. Apple is not the only player out there in the handset market.

Analysis: It is difficult to argue against the fact that Apple has a large portion of WW NAND production currently allocated to them. This is causing other, smaller flash card/drive manufacturers to suffer at the hands of the semis. There have been verifiable rumors of supplier (i.e. semis) de-committing on orders to smaller customers, resulting in long lead times and increased backlog/canceled orders for some of these smaller, sub-$500M players in the market. I have heard verifiable rumors of certain niche SSD manufacturers increasing lead times on new orders to 12-18 weeks, more than an entire quarter.

I believe when Apple launches a flash-based video iPod, as speculated, they will demand even more of WW NAND production,, which will trickle down to the smaller card houses, but we also cannot discount the market influence other handset manufacturers. Most of these manufacturers are either embedding NAND into the phone, or offering an expansion card slot for MicroSD. Some are doing both. My Blackberry 8800 contains both onboard NAND and an expansion slot, which I immediately filled with a 1GB MicroSD. This will definitely cause an even greater tightening of certain NAND over the next several months.