A Flash in the iPod

In a move that could have big implications for the storage and chip markets, Apple (AAPL) will unveil a new flash memory-based iPod later this year, say analysts.

The company will soon replace its hard drive-based 4GB iPod mini with a flash memory-based version that has the same storage capacity, Nam Hyung Kim, an analyst with industry research firm iSuppli, says in a recent report.

A report this week from Deutsche Bank Securities analyst Ben Lynch says Apple is expected to have the device on store shelves in time for the holidays; Kim says Apple is expected to ship 3 million to 6 million of the devices in the second half of this calendar year.

Should the reports pan out, the move could be a boon to the flash memory industry, particularly Samsung, which has struck a deal to provide Apple with flash memory chips.

Conversely, the deal could be a blow to hard-drive makers such as Seagate Technology (STX) and Hitachi(HIT), which have supplied hard drives for the current iteration of the iPod mini.

"With the iPod, Apple has already revolutionized the music industry. Now, because of the iPod's enormous success, Apple is reshaping the memory industry as well," said Kim in his report.

Representatives for Apple and Samsung declined to comment on the reports.

Seagate, based in Scotts Valley, Calif., has been widely reported to be among the hard-drive suppliers for Apple's iPod mini. Seagate spokesman Brian Ziel declined to confirm whether the company has a relationship with Apple.

However, Ziel says a wide market exists for the 1-inch drives that are used in digital players such as the iPod mini. "There's certainly a lot of talk about unpredictability in the 1-inch hard-drive space in the next six months. But we have a very broad participation in the market," Ziel says. "We are still very bullish on that market."