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Lack of memory capabilities threaten Apple's future

Posted: 09 Sep 2013  Print Version  Bookmark and Share

Keywords:DRAM  NAND  smartphone 

According to IHS, as major innovation requires a great deal of memory capabilities, Apple is faced with an uncertain future with Samsung making headway as the memory market leader. The lack of memory capabilities is expected to impede Apple's innovation, noted the market research firm.

Samsung is the leading supplier of both dynamic random access memory (DRAM) as well as NAND flash, both of which are essential components in nearly all of today's consumer electronics, including smartphones and tablets where Apple enjoys great success, via its best-selling iPhone and iPad devices.

In Q1, Samsung's revenue of $4.6 billion accounted for 36 per cent of the total DRAM and NAND memory market of $12.8 billion. To put into perspective Samsung's gigantic heft, its output exceeded that of No. 2 SK Hynix and No. 3 Toshiba combined. Samsung was also bigger than the accumulated totals of Toshiba, No. 4 Micron Technology and fifth-ranked Elpida.

"While the argument can be made that Apple sees some benefits by not sharing critical prototype design information with Samsung, the fact remains that Apple limits its options by not doing business with Samsung, which places Apple at a disadvantage," said Mike Howard, senior principal analyst, DRAM & memory, for IHS. "The difficulties presented by this challenge become even more acute considering that the memory industry continues to consolidate, especially in DRAM. The recent closing of Micron's acquisition of bankrupt Elpida means there are now just three major DRAM developers and four NAND developers left. As Apple's memory suppliers get bigger because of consolidation, they are likely to gain more bargaining leverage. This is a trend all memory buyers will face, and Apple—even with its heft—is not exempt."


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