A new "teardown" report from research firm iSuppli describes all the parts that go into the iPod Nano. (Total bill of materials for the 2GB model = $90.18.) A big chunk of the player is NAND flash memory from Samsung. iSppuli estimates that Apple will be buying up to 40% of all Samsung’s production and squeezing out a lot of other customers. As the analyst Nam Kim put it to me in an email:
…there is no product available for other small and mid-sized card/USB/MP3 player makers.
Currently, manufacturers are in a panic mode in Asia. Buyers are looking around alternative sources such as Toshiba and Hynix. Toshiba and Hynix's production won't even meet customers demand by December this year. As a result, card prices won't decline in near future. However, as MP3 player sales pattern is very seasonal, NAND market will be back to oversupply in Q1 2006.
Ah springtime! The season for fresh love, fresh flowers, and fresh memory cards.