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Wednesday, June 21, 2006, 04:00 pm PT (07:00 pm ET)

iPod nano refresh may cause NAND flash shortage

Market research firm Gartner predicts there will be a shortage of NAND flash by the fourth quarter of the year, especially if Apple Computer unveils a flash-based iPod music player with 10-to-12 gigabytes of storage capacity.

Apple has yet to make any announcement about whether it will sell an iPod with more than 4GB of flash memory, but sources have said to expect a completely redesigned iPod nano in September.

"We're expecting a more severe shortage," Gartner analyst Joe Unsworth said in a phone interview with CBS Marketwatch. This should have positive implications for NAND flash suppliers such as Samsung, Toshiba, SanDisk, Micron and Intel, he said.

Gartner now forecasts a 5.8 percent shortage of NAND flash by the fourth quarter, up from its previous expectation of a 3 percent to 4 percent shortage.

The firm said digital music players, led by the iPod, will drive growth of the NAND flash market in the second half of this year.

Apple currently sells iPod nanos with either 1GB, 2GB or 4GB of NAND flash-based storage.