While it might seem an odd pairing, cloud computing and DRAM, this is neither a type-o nor a misunderstanding. With Mobile World Congress (MWC) having kicked off officially Monday in Barcelona, Spain, there is even more attention being paid now to smart phones and tablets and their ability to manage, stream and store data.
Apple news is currently following (perhaps unsurprisingly?) on the heels of Nokia CEO, Stephen Elop's (official) announcement Friday of the new Nokia-Microsoft partnership for Nokia smartphones and Microsoft's Windows Phone 7 (WP7) operating system (OS) (cf. this MarketWatch Commentary post and the latest here from WSJ.com). The news? The latest iPod Nano is reported to be designed without NAND in order to dramatically lower cost – this means an increased importance on DRAM as 'on board memory' will be necessary for those 'No Service' moments we all face (see the latest here from iSuppli on this story). How will this work? The idea is that the new Nano will make heavy use of the cloud.
Couple the above news with what is being confirmed not only by Nokia's Elop, but also at MWC, and what we've been saying here at Smith's MarketWatch for a while now is borne out: leading smartphone differentiation is quickly becoming not about the component and feature differences of the devices, but about the OS and services (cf. this ElectronicsWeekly report from MWC and here and here from Smith's MarketWatch).
But there is more to this focus on OS than the new battle ground for market share and consumer electronics (CE) devices, there is an important shift taking hold that is forecasting a boon for the components making up the BOM for these devices. Firstly, let's not forget about NAND. NAND will continue to see strong sales exploding around the five-fold mark (that's about 400%!) in 2011 thanks to tablet and other smart wireless device (SWD) sales (smartphones absolutely included in this device class), according to this recent iSuppli report. One might think there was no following that forecast, but there is an important growth forecast for DRAM as well; noteworthy especially in light of the declines that had been feared due to NAND surges. Analysts are now estimating that mobile DRAM will grow by somewhere in the 70% range in 2011! Yes, seventy percent! (cf. this EETimes report). Beyond mobile DRAM is also the anticipated increase of DRAM content in tablets as 1GB looks to be standard at this point, and 2GB is anticipated before long in 2011 (cf. here for iSuppli's perspective based on HP and here for iSuppli's view on mobile DRAM based on TI's latest processor releases).
What to make of all this? Well, with the way utilization and line dedication has been going, coupled with CAPEX investment trending recently, there are some of us questioning whether the industry is truly prepared to handle the demand being forecasted by these most recent reports.