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Falling memory prices may bring irritating, intrusive devices

Flash memory is in most everything at CES, and it keeps getting cheaper

January 8, 2012 08:38 PM ET

Computerworld - LAS VEGAS -- Everyone likes it when prices fall, right? But there may be a point when flash memory gets too cheap for its own good.

NAND flash memory prices are expected to decline by half by the end of the year, from 70 cents a GB to 35 cents, keeping with historical price declines, said Jim Handy, chief analyst at market research firm Objective Analysis.

The falling prices may make it more cost-effective to use memory in new ways, such as in-store advertising, Handy said.

Handy said retail customers may soon see widespread use of "these very annoying little LCD screens" in grocery and drug stores. When you walk past them, "somebody starts barking at you from a video and talking about how you need this or that thing," he said.

In-store advertising displays "are probably going to become extraordinarily prevalent just because of the fact that they are cheap and they just gobble up a ton of flash," said Handy, who was speaking at the Storage Visions conference here, held in conjunction with CES.

Memory prices will continue to fall in the 40% to 50% annual range, which will help to broaden the use of devices that use flash memory.

If it is mandated, for instance, that automobiles have back-up cameras, "it's a very short step to have a recording back-up camera," Handy said. There are some good uses, such as flash memory in caching, and in televisions with TiVo-like capabilities.

Despite falling prices, Handy doesn't see flash memory prices reaching parity with hard disk drive prices.

There has been a 20-to-1 price difference between the two, and it takes about seven years for NAND flash to get to the price of hard disk drives, said Handy. "They are pretty far apart from each other and they are likely to stay that way."

Although more users are storing content in the cloud, Stephen Baker, an analyst with the NPD Group, doesn't see the trend affecting consumer demand for storage. He said consumers continue to seek computing devices that have lots of storage, which he called one of the "prime drivers" behind a purchasing decision.

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Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at Twitter @DCgov or subscribe to Patrick's RSS feed Thibodeau RSS. His e-mail address is pthibodeau@computerworld.com.

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