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Thursday, August 06, 2009, 07:10 am PT (10:10 am ET)

Demand for memory in phones to grow, thanks to Apple

A new report predicts that demand for NAND flash memory in cell phones will more than triple by 2013, with a majority of that need being driven by Apple and its iPhone.

In all, sales of solid state memory in phones are predicted to have a nearly sixfold increase in the span from 2008 to 2013, with nearly $1 billion in revenue from flash memory sales by the end of that span.

The new report from iSuppli credits Apple for the growth in popularity of flash memory in smartphones. In 2008, NAND flash generated $166.5 million in revenue, and in 2009 it is projected to bring in $284.3 million.

"Soaring sales of smart phones, combined with the increasing density of NAND flash in each handset, is causing sales of the memory in this area to boom," said Michael Yang, senior analyst for mobile and emerging memories at iSuppli. "NAND flash makers can thank Apple Inc. for starting this trend, with its iPhone models injecting new life into the memory market. However, with the introduction of the a new generation of 'iPhone killers,' multiple smart-phone makers now are helping to drive NAND demand."

The iPhone maker is predicted to continue using up much of the solid state memory supply with its expansion into China. The country of over 1 billion is predicted to buy millions of phones from Apple. It is expected that the phone's availability will be announced by February 2010.

Last week it was revealed that a new iPhone model has been granted regulatory approval in China. The new model is reportedly a GSM/WCDMA model that operates on the 900MHz, 1700MHz and 1900MHz bands. It also includes Bluetooth, but no Wi-Fi. It was approved on May 7, according to a China's State Radio Regulatory Commission filing, and can be used in China for the next five years.

"Apple announced it sold 5.2 million iPhone 3G and 3GS models during its fiscal third quarter, which ended in June," Yang said. "Furthermore, Apple plans to introduce the iPhone in China, possibly early next year. This will open up the market for the iPhone to a new potential audience of 1.3 billion people."

When it first arrived, the iPhone offered capacity up to 8GB. Now, the top-line iPhone 3GS offers users up to 32GB of storage. Competitors to the iPhone, like the Palm Pre and HTC G1, offer 8GB of capacity.

As the amount of memory in smartphones is predicted to grow, so are the sales of such devices. While smartphones had 13.1 percent of shipments in 2008 iSuppli projects that they willl account for 26.4 percent in 2013.

Recently, Apple prepaid for a half-billion dollars in NAND flash memory from Toshiba. The iPhone maker aims to secure its long-term supply of memory for portable devices