All Things Digital

Apple (AAPL) is to the NAND flash memory business what Starbucks (SBUX) is to the coffee business–a market maker and mover. Particularly a mover. The company first shook up the NAND market back in 2005 when it arranged to purchase up to 40 percent of Samsung Electronics’ holiday NAND output for use in it iPods.

And now it’s creating a bit of a stir again, this time thanks to the iPhone. Apple plans to buy 50 million 8Gb-equivalent NAND flash chips from Samsung. That’s an awful lot of NAND–so much, in fact, that the chip manufacturer has been forced to reduce its supply to other customers to fulfill its obligation to Apple.

Ugly news for any Samsung customer not headquartered in Cupertino, Calif. That said, the deal’s impact on the NAND market could be a reduction in prices for all. Something to look forward to, after the drought, I suppose.

With its curvier edges, stylish silver trim, half-VGA 480-by-320 pixel screen and improved iTunes compatibility, Research in Motion’s (RIMM) new BlackBerry Bold should be a big hit with IT operations professionals convinced the iPhone isn’t an enterprise-class mobile device but driven to near-aneurysm by discontented employees demanding them.

The device is largely as expected–an iPhonish-looking thing with both GPS and Wi-Fi, 1GB of permanent flash memory, a 2-megapixel camera, full HTML browsing, 3G support on GSM networks with HSDPA access and, of course, the BlackBerry’s one-trick killer app: instant, secure email. That’s a compelling combination for business users and casual ones not easily swayed by the iPhone’s hype juggernaut as well. Indeed, Citigroup analyst Jim Suva says it could boost RIM’s quarterly shipments by 200,000 to 400,000.

But perhaps not without a bit of struggle. The BlackBerry Bold won’t ship until as late as August, which means Apple (AAPL) could beat it to market with the enterprise-friendly 3G iPhone it’s rumored to be uncrating at its Worldwide Developer’s Conference in June. Which has got to worry RIM. After all, the first-generation iPhone had claimed a 28% market share by the fourth quarter of 2007. That’s still less than the BlackBerry, which holds about a 41% market share, but the iPhone hasn’t even been on the market a year.

Apple doubled the capacity of the iPod Touch and the iPhone this morning. The iPod Touch is now available in three versions: an 8GB model for $299, a 16GB model for $399 and a 32GB model for $499. The iPhone now once again comes in two capacities: 8GB for $399 and 16GB for $100 more.

“For some users, there’s never enough memory,” Greg Joswiak, Apple’s vice president of Worldwide iPod and iPhone Product Marketing, enthused in one of Apple’s typically self-aggrandizing press releases. “Now people can enjoy even more of their music, photos and videos on the most revolutionary mobile phone and best Wi-Fi mobile device in the world.”

Aside from the increase in capacity, which will come in handy for iTunes movie rentals, the new devices appear unchanged from their predecessors–a disappointment for those hoping for a faster 3G iPhone. Also nowhere to be found, three new MacBook Pro models that MacRumors claims to have spied in Best Buy’s inventory-tracking system.

Flash memory maker SanDisk has apparently devised a means of offsetting the legal bills that might arise from the price-fixing suit filed against it (and 23 other companies) earlier this year: suing the better part of the removable flash storage industry for patent infringement.

SanDisk filed three patent-infringement lawsuits against 25 companies that make, sell or import USB flash drives and other removable flash storage products yesterday, seeking damages and a permanent exclusion order from the U.S. International Trade Commission banning importation of infringing products into the United States.

SanDisk hasn’t yet disclosed publicly the patent(s) at issue here–and there are certainly a number of possibilities– but No. 5,602,987, Flash EEprom system may be one of them. After all, the company has used it for these purposes before.

Anyway … Among those on the receiving end of SanDisk’s suit: LG Electronics, Buffalo, Corsair, Kingston, Verbatim Transcend and Imation/Memorex. “These actions demonstrate SanDisk’s long-term commitment to enforcing its patents, both to protect our investment in research and development by obtaining a fair return on that investment, and out of fairness to third parties that participate in our patent-licensing program,” E. Earle Thompson, chief intellectual property counsel at SanDisk, said in a statement, noting that defendants named in SanDisk’s suits would be offered the chance to participate in its patent-licensing program. “Otherwise, we will aggressively pursue these actions, seeking a prompt judicial resolution awarding damages, obtaining injunctive relief and banning importation of infringing product.”

Apple once said of its first iPod that “1,000 songs in your pocket changed everything.” And while that may be true, it wouldn’t have changed much without the pioneering work of Albert Fert and Peter Grünberg, who discovered GMR (giant magnetoresistance), a nanotechnology that makes it possible to read data that is densely packed onto the surface of a magnetic disk.

Today Fert of the Université Paris-Sud in France and Grünberg of Forschungszentrum in Jülich, Germany, were awarded the 2007 Nobel Prize in Physics by the Royal Swedish Academy of Sciences for their work that made “1,000 songs in your pocket” a reality.

“In 1988 the Frenchman Albert Fert and the German Peter Grünberg each independently discovered a totally new physical effect–giant magnetoresistance, or GMR,” the academy’s prize citation explains. “Very weak magnetic changes give rise to major differences in electrical resistance in a GMR system. A system of this kind is the perfect tool for reading data from hard disks when information registered magnetically has to be converted to electric current. Soon researchers and engineers began work to enable use of the effect in read-out heads. In 1997 the first read-out head based on the GMR effect was launched and this soon became the standard technology. Even the most recent read-out techniques of today are further developments of GMR.”

Amazing, yeah? Without Fert and Grünberg’s work, we’d be lucky to store a single song in our iPods.

“It’s no good having computer hard drives that can store gigabytes of information if we can’t access it,” Jim Al-Khalili, physics professor at the University of Surrey, told the Financial Times. “The technology that has appeared thanks to the discovery of GMR has allowed hard-disk sensors to read and write much more data, allowing for bigger memory, cheaper and more reliable computers. GMR is one of those wonderful phenomena from the weird world of quantum physics that has been put to use very quickly.”

Asked if he’d ever thought his discovery would have such an impact on consumer electronics, Fert told the Associated Press, “You can never predict in physics. … These days when I go to my grocer and see him type on a computer, I say “‘Wow, he’s using something I put together in my mind.’ It’s wonderful.”

Thanks to its iPod Shuffle and Nano, Apple’s appetite for NAND flash memory is akin to McDonald’s for potatoes–near insatiable and market moving. Back in 2005, Apple made headlines for a reported agreement to buy 40% of Samsung Electronics’ NAND flash-memory chip output and rumored plans for a joint foundry with the South Korean company.

Today, the company is in the headlines again–this time because it’s on track to consume 25% of the world supply of flash memory in the third quarter. And according to Taiwan-based online chip clearinghouse DRAMeXchange, that will lead to a chip shortage. “According to DRAMeXchange’s figures, in the wake of the expected hot iPod sales and chip inventory buildup for 4Q07, the iPhone and iPod will take up roughly 25% of worldwide NAND flash production in 3Q07,” the company said. “As a huge portion of the capacity is being allocated to Apple in meeting the anticipated demand in 2H07, many downstream vendors have been unable to secure enough flash chips. … A flash chip shortage will occur in the third quarter. Flash prices are thus projected to continue rising.”

Seems Apple’s not only reshaping the music and cellphone industries, but the memory industry as well.