End of Life for HDD based iPods?

August 27, 2008 at 1:14 pm 1 comment

     In the remaining few days leading up to the annual iPod refresh, quite a few analysts have weighed in on whether Apple will switch to all flash memory for its iPods or keep hard disks around a bit longer. The popular belief is with solid state memory getting cheaper, flash capacities on par with current 80 or 160GB hard drives are foreseeable in the near future. But the truth of the matter is flash memory isn’t getting cheaper fast enough: faced with significantly lower customer order projections for 2008 and at least through the first three quarter of 2009, solid state memory manufacturers are scaling back production in order to firm up bulk pricing on existing  batches.

     As a result, even with a weaker demand, pricing for higher capacity memory batches have fallen less than earlier expectations and the portable media player segment with more than 16GB of onboard memory has suffered from stunted growth. Apple can certainly negotiate better unit pricing for its iPod memory buys than your average low volume device manufacturer but it will take an improving global economy to encourage chip producers to implement the essential newer manufacturing technologies to achieve higher batch densities resulting in substantially lower prices.

     What do the prospects of long term pricing stability in the flash memory market mean for Apple? I believe there exits a gap of at least 2 to possibly 3 years before which flash based iPods in excess of 100GB capacities can be deemed affordable for the US consumer. Apple is aware of this problem and introducing a HDD based Touch could be a potential solution. Such a model can effectively serve as a stop gap measure until bulk pricing prospects for higher density solid state memory batches can significantly improve. A HDD based Touch could be introduced quickly given that the device requires fairly minor changes from its current design and can be released to manufacturer in short order. The other HDD based possibility, which I’ve already covered on earlier posts, is the continuation of the 160GB Classic model with improvements to the software and hardware. We’ll see how Apple maneuvers in the weeks ahead but based on current economic conditions, the sun certainly hasn’t set on the idea of HDD based media players just yet.

D.S.

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Entry filed under: iPod. Tags: , .

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1 Comment Add your own

  • 1. Tom  |  August 27, 2008 at 1:44 pm

    Wouldn’t a HDD based Touch really rock the boat of the iPhone ecosystem? The 16GB would by comparison be have nano sized storage space to what is supposedly it’s inferior non-phone sibling. Interesting to wsee where the Classic, Touch and iPhone will lie.

    Reply

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