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Apple's iCloud Could Dent Flash Demand

Market research firm IHS said that Apple's iCloud offer may prompt consumers to reconsider their need for more flash memory and decrease the growth of demand over time.

Apple currently buys about 30 percent of all Flash memory currently produced, about 5.2 billion gigabytes of a total of 18.5 billion gigabytes. By 2015, IHS believes Apple's share will be down to about 23.9 percent.

“Apple has contributed greatly to the growth of the NAND business in recent years,” said Dee Nguyen, memory analyst at IHS. “However, the company’s adoption of cloud storage could have significant implications because the fastest-growing segment of the NAND flash market lies in the storage component of convergent mobile devices like smartphones and tablets. And with Apple products like the iPhone and iPad accounting for a disproportionate share of NAND flash demand, any move among Apple users to offload storage to the company’s iCloud service could mean a corresponding decrease in demand for physical NAND flash memory in the future.”

So, is this good news or bad news for Apple's rivals? They may be able to get easier access to flash memory, but they will also be following a cloud trend and align their devices with Google, Amazon or other cloud services. The question is when and if consumers will adopt cloud services. IHS said that Apple's promise to store up to 25,000 songs per user free of charge, translating to about 100 GB of storage. However, cloud storage is not as attractive yet, as it requires a fast and permanent connection as well as better security features to carry high value.

For now, IHS believes, the impact of the iCloud on flash memory demand will remain low. "The most likely scenario for the time being is an increase in overall demand for NAND storage - cloud or local- with users continuing to utilize the physical storage on their personal devices," the company said. But there is the clear picture that a ton of local storage in all our devices may not be so important in the future.