Apple's Flash in Plan

Apple (AAPL) may be turning to an old recipe to maintain its dominance in the digital music market.

According to recent news reports, the iPod maker talked with Samsung earlier this year about investing in the production of flash memory chips. Although the talks were called off, some analysts expect Apple to pursue a similar deal with Samsung or some other vendor.

Apple's strategy may be unusual, but it's a response to recent success, says Tim Deal, an analyst with Technology Business Research. "The unprecedented success of the iPod ... has become the prime strategic focus of Apple," says Deal.

"As a result, it's changed the way the company normally does business."

The specifics of the deal contemplated by Apple and Samsung are unclear. An Apple representative declined to comment, and a Samsung representative would only say in a statement that the two companies earlier this year considered a joint investment in NAND flash memory production.

Flash memory is a nonvolatile form of storage on semiconductor chips, of which NAND is the type used most commonly in digital music players because it's often less expensive than NOR flash, the other main type.

Because it has no moving parts, flash memory is considered to be more stable than hard drive-based storage. But at larger capacities, flash memory modules tend to cost far more per gigabyte than hard drives.

With the proliferation of portable drives and storage cards for digital pictures and songs, the demand for flash memory has been booming. Apple has only added to that demand.

Earlier this year, it rolled out the iPod shuffle, which quickly became the top-selling flash-based player. And last month, the company unveiled the iPod nano, a flash-based player with a color screen that sold more than 1 million units in its first 17 days on store shelves.