NAND flash sales for smartphones to boom, says iSuppli

Global sales of NAND flash memory for use in smartphones are expected to rise by nearly six-fold from 2008 to 2013, as shipments of the high-end phones boom in the coming years, according to iSuppli.

Global revenues from sales of NAND flash for mobile phones is set to rise to US$932.5 million in 2013, up from US$166.5 million in 2008, said iSuppli. This will represent a CAGR of 41.1%, compared to the 12.2% increase during the same period for the overall NAND flash market.

"Soaring sales of smartphones, combined with the increasing density of NAND flash in each handset, is causing sales of the memory in this area to boom," said Michael Yang, senior analyst for mobile and emerging memories at iSuppli. "NAND flash makers can thank Apple for starting this trend, with its iPhone models injecting new life into the memory market. However, with the introduction of the a new generation of 'iPhone killers', multiple smartphone makers now are helping to drive NAND demand."

The market for smartphones is expanding at a much faster rate than that of the overall wireless handset segment, accounting for 26.4% of total handset unit shipments in 2013 up from 13.1% in 2008, according to iSuppli. The iPhone is a major factor driving the growth.

"Apple announced it sold 5.2 million iPhone 3G and 3GS models during its fiscal third quarter, which ended in June," Yang said. "Furthermore, Apple plans to introduce the iPhone in China, possibly early next year. This will open up the market for the iPhone to a new potential audience of 1.3 billion people."

The arrival of competitive products like the Palm Pre, the BlackBerry Storm and the Google operating-system-equipped T-Mobile G1 will further drive the expansion of the smartphone market, Yang indicated.

NAND usage rises

Along with spurring the growth of the smartphone market, Apple has taken a leadership position in enhancing the functionality of these products by adding additional NAND flash memory to its iPhone line. "The more NAND in a smartphone, the more useful it becomes, able to store more songs and video clips, to hold more map data and download more programs from an applications store," Yang said.

The initial iPhone base model introduced in January 2007 integrated 4GB of NAND. The latest version of the iPhone, the 3GS unveiled in June, upped the low-end model's NAND density to 16GB. The high-end 3GS integrates 32GB of NAND. The new iPhone killers, including the Pre, the Storm and the G1, all include 8GB of NAND. However, some models are increasing their NAND density to higher levels. For example Nokia's N97 embeds 32GB of NAND flash.

iSuppli predicts NAND densities in smartphones will continue to increase. Accordingly, the average amount of NAND flash in all mobile phones shipped worldwide will rise to 5.8GB per handset in 2013, up from less than 1GB in 2008.