Friday, October 07, 2005

Samsung-Apple Deal Deeper Than Recognized?

While I stopped publishing my Apple rumor site, MacWhispers, almost two-years ago, my daily business activities keep me in constant contact with a wide range of Taiwan and China based manufacturers. Basically, I hear things. And, what I have been hearing more and more the past couple of weeks leads me to think that Apple's recent scaling up of involvement with Samsung is a lot bigger deal than simply contracting for good NAND flash memory pricing.

Apple Embraces Flash Memory

My friends in the orient (I will refrain from calling them 'sources') have been filling my ear with all sorts of info about strange disruptions in the flash memory market, all openly attributed to 'upcoming products from Apple.' Samsung has just shown a prototype of a tiny flash memory storage notebook computer. The wire is all atwitter with murmers about new Powerbooks and video devices and wireless devices coming from Apple. Tie the ideas together with Apple's sudden access to high-end flash memory at over 40% below market pricing, and... well, you can see some very interesting possibilities.

Flash Memory Is Very, Very Small

Flash memory has two major characteristics that differ from disk based storage. Flash is smaller; and, it uses much less power. When viewed against two simple questions, this quickly shines light on what Apple is about to bring to market. Those questions are: What device types now made by Apple could be radically improved by reducing size and power consumption? And... What completely new types of devices might make commercial sense, if they could be smaller and lower power than possible with hard drives? A number of answers come to mind, with the ones here best matching up with the loose talk I've been picking up from my China buddies.

Video iPod? "Think Different"

While the world argues about whether Apple is about to launch a video capable iPod, I will make the risky prediction that it's not whether Apple will launch such a device, but when they will launch a video capable iPod. With the Samsung deal in place, Apple can drop a couple of miniaturized video models into the $400 to $600 space, using 16GB or 32GB of flash memory, rather than a hard drive. Combined with some clever file compression and streaming details (based around the H.264 standard), such pencil-thin iPods could deal with dozens of music video type clips, several SD-quality movies, or, even a couple of HD-quality movies. Imagine a 2.5" x 4" full-screen video player, the thickness of the iPod nano.

The Powerbook nano?

When Apple gave us the 12-inch Powerbook, a steady stream of voices began a chant for an even smaller Powerbook, one handy enough to carry with little more effort than a day planner. The Samsung deal, and the availability of 8GB (and, rumored 16GB) NAND flash chips are still too small and pricey to replace HDD storage in notebooks. However, continuing declines in pricing and increases in capacity to hit a crossover point within 5-years that will give Apple the chance to hit that glorious techno-marvel sweet spot that they love to hit with any all-new product. Imagine a small, fully-functional Powerbook the same thickness as an iPod nano, with an 11" to 13" widescreen display, and 64GB to 128GB of flash, instead of a hard drive. Toss out the normal hard disk drive, and this form factor suddenly becomes very buildable. In not too many years it will be possible at under $1,000. That's when Apple will leverage their then massive flash memory channel strength and do it.

Airport Extreme Extreme

Streaming video from a player device to other playback devices in a home is not a real-time process. Some delay is acceptable, just as the 2 to 3-second delay in streaming music over Airport is accepted. But, video streams are much fatter than music streams... even SD video. And, decoding a video stream is a massive chore compared to decoding music. Current Airport Extreme models lack the horsepower for the job. The solution? AE models with better processors, and with (you guessed it) onboard flash memory buffer storage, and multimedia decoding/transmission functions.

The Mythical Apple Mobile Phone

My final conjecture here is that the deep commitment Apple is making to its flash memory supply signals broad internal development within Apple aimed at -- yes -- flash memory based mobile devices. In a big way. In fact, in a way bigger than likely forward growth of only the iPod platform would support. This leads to the question, "What other mobile device could sell in large enough numbers to drive Apple's commitment to lock up its mobile memory device supply? The only practical answer is "phone." When? Who knows? ... when Apple can get it right, that's when, no sooner. But if there's ever been an indicator that Apple really actually is developing a mobile phone, it is these moves in its flash memory channel.

Flash Devices. Fact Or Fiction?

Are flash-based video iPods, Powerbooks, and home media streaming devices actually about to be announced by Apple? Only Steve jobs and his cronies know for certain. But, if I've tallied the realities and the whispers correctly, my prediction is that at least two of these will be shown in the not too distant future. If so, I'll be at the head of the line, credit card in hand, to buy one of the new iPod video players...and, someday, a flash-based MacBook, and an Apple mobile phone.

Big Flash Future

One thing is clear from the channel indicators: Apple is making a huge, huge internal commitment to mobile devices. If I am right, I wouldn't doubt Apple soon becomes the world's number one buyer of flash memory.

And, wouldn't that be a kick in the pants?


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