Falling prices for flash memory might allow Apple to double storage on the iPhone, Sacconaghi writes.
Samsung also builds flash memory chips for Apple at the factory, according to the report.
"We continue to work with Apple to bring Flash to the iPhone, " said Mr Wadhwani.
Apple first abandoned Flash on its iPhone and iPad, citing performance and battery issues.
FORBES: Forget Apple And Microsoft, Adobe Can Hit $35 In A Flash
Nobody talks about the big break Apple got on flash memory component costs this past year now ending.
However, there's another flash-based player that Apple briefly mentioned at Macworld Expo that stands to become more strategically important to the computer maker down the road than the iPod shuffle.
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In November Adobe announced that it was finally abandoning development of Flash for mobile browsers, and refocusing on HTML5 for delivering interactive features and video -- the death rattle of a long struggle in which Apple resisted letting Flash run on its iOS mobile operating system.
Apple had chosen not to adopt Flash on the iPhone, but I assumed it was just a matter of time before Apple and Adobe figured out a way to fix that.
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Mr. Lam said that could indicate a decision by Apple not to buy memory from Samsung, the world's biggest supplier of flash memory chips, amid continuing patent litigation between Apple and the chip maker's parent.
Microsoft has been very quietly moving and making progress on that front, while all of the flash and interest has gone to Apple.
It has a 40% market share in DRAM and NAND Flash where companies like Sony and Apple are its major customers.
Betting that Flash was a declining technology, Apple chose instead to support HTML5, the next version of the standard programming language for describing the content and appearance of web pages.
And, Apple aside, its Flash technology is actually available on 20 million smartphones, and the company expects it to reach 200 million smartphones and tablets by the end of this year, Adobe says.
Given that it will take one or two quarters for memory companies to reconfigure their factories to crank out more NAND flash memory, Handy argues, Apple's fresh orders should sop up enough capacity to keep prices steady, at least for now.
Another Apple-related example: Raz asked what Facebook would do about allowing iPhone users to upload videos from their smartphones to the social network, given that the videos currently play on Flash, an Adobe product that Apple very publicly has a problem with.
It was bad enough when flash memory overtook hard drives in little devices: Apple's classic iPod used a tiny hard drive memory, but the other models rely on flash memory.
But the 451 Group's Greg Quick argues that Apple has helped push down flash prices.
In 2011, Adobe took another shot at improving their mobile AIR VM this summer and with a lot of pressure on Apple, the floodgates for Flash applications for iPhone were opened.
Adobe and Apple have been feuding publicly, and loudly, over Apple's refusal to run Flash on its products.
That's good news for Apple supplier Samsung, the largest flash memory-maker.
If Apple is buying between 400 million and 500 million 4 gigabit NAND flash memory chips from Samsung, as reported in the trade press, that probably represents 40% of Apple's total orders, Handy figures.
And not content with anything less than total domination, in January Apple introduced the iPod shuffle, a flash-memory player, which is naturally smaller and better looking than anything the competition can yet muster.
It was bad enough when flash memory overtook hard drives in little devices: Apple (nasdaq: AAPL - news - people )'s classic iPod used a tiny hard drive memory, but the other models rely on flash memory.
Unlike Apple's device, it supports Adobe Flash, enabling it to show more video found on the Internet.
But more than that, Apple has been disengaging from Samsung as a flash memory supplier, even as a screens supplier.
Apple is offering Macbook Air computers with only flash memory and there is talk of moving the Macbook Pro to only solid state storage.
FORBES: Will A Fusion Drive Approach Become Widespread in Computers?
Under its shiny new skin, new hardware and software, such as a slimmed down version of Apple's OS X operating system and a flash memory drive, instead of the current iPod's mechanical hard drive, could keep the new device thin and light.
Apple has introduced a very innovative approach to combining HDDs and flash memory that it should extend beyond desktop computers.
FORBES: Will A Fusion Drive Approach Become Widespread in Computers?
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