Apple may use flash memory for notebooks: analyst

SAN FRANCISCO Thu Mar 8, 2007 2:29pm EST

People shop inside an Apple store in London in this March 29, 2006 file photo. Apple Inc. may sell zippy notebook computers later this year that use the same type of fast memory as music players and digital cameras, driving down prices of hard-disk drives, an analyst said on Thursday. REUTERS/Dylan Martinez

People shop inside an Apple store in London in this March 29, 2006 file photo. Apple Inc. may sell zippy notebook computers later this year that use the same type of fast memory as music players and digital cameras, driving down prices of hard-disk drives, an analyst said on Thursday.

Credit: Reuters/Dylan Martinez

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SAN FRANCISCO (Reuters) - Apple Inc. may sell zippy notebook computers later this year that use the same type of fast memory as music players and digital cameras, driving down prices of hard-disk drives, an analyst said on Thursday.

The maker of the popular iPod music player and Macintosh computers hopes to introduce so-called flash memory in small computers known as subnotebooks in the second half of 2007, Shaw Wu, an analyst at American Technology Research who has a "buy" rating on Apple shares and does not own any stock, said in investor notes on Wednesday and Thursday.

A shift to flash memory in place of much slower hard-disk drives would eliminate one headache for consumers: lengthy start-up times when turning on computers.

Apple of Cupertino, California, already uses flash memory in its iPod Nano and iPod Shuffle music players. Flash memory is lighter, uses less power and takes up less space than hard-disk drives.

Wu, who was among the first analysts to forecast the unveiling of Apple's iPhone music player/phone earlier this year, cited unnamed industry sources as the basis for his report.

"The time is right for the flash makers to make a move" as flash memory prices decline, Wu said by telephone. "Apple, from what we understand, is pretty much ready. The ball is in the flash vendors' court."

Apple spokeswoman Lynn Fox said the company does not comment "on rumor and speculation". Apple shares were up 60 cents, or 0.7 percent, at $88.32 in early afternoon trading on Nasdaq.

A transition to flash memory for computers could put pressure on makers of traditional hard-disk drives including Seagate Technology, the largest U.S. hard-disk drive maker, Wu said.

Apple, known as a technology innovator, would be among the first personal computer makers to use flash memory for storing data in computers, a step that some chip memory makers, including Micron Technology Inc., have said is inevitable as prices for flash decline and storage capacity increases.

Flash memory chips have solid state circuitry that uses no moving parts, making them less vulnerable to damage than hard-disk drives. Prices of flash memory have been declining rapidly but are still higher than those for hard-disk drives, Wu said, meaning early flash-based computers would be more expensive.

Apple would use a miniature version of its Mac OS X operating system in the flash-based subnotebook computers, Wu said, again citing unnamed sources. The computers could be introduced in the second half of this year, he said.

Shares of Samsung Electronics Co. -- the world's largest maker of so-called NAND flash memory used in gadgets such as cell phones, music players and digital cameras -- closed up 0.7 percent in Seoul. Toshiba Corp., the No. 2 flash maker, rose more than 5 percent in Tokyo.

Shares of Seagate were up 10 cents, or 0.4 percent, at $24.80, in early afternoon trading on the New York Stock Exchange.

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