Apple's Flash in Plan

If anything, Apple is in a better position to make a similar investment today -- and has more reason to do so.

At the end of last quarter, the company had $8.3 billion in cash and short-term investments on its balance sheet, so it certainly has the means. But the iPod nano is replacing the company's iPod mini, formerly the most popular model in Apple's player lineup.

Considering that iPod sales have accounted for the lion's share of its revenue growth over the past several years, success of the nano is crucial to Apple.

"The iPod line is so important to Apple -- so high profile -- they want to be sure that they don't have recurring [component] shortages," says Shyam Nagrani, who covers the consumer electronics industry as an analyst for iSuppli, a market research company.

But an investment in a flash memory maker's production capacity could do more than just assure supply. It could also give Apple favorable prices on flash memory. The company could either use the savings to pad profit -- or to cut prices in the face of heightened competition.

Although Apple is known for offering pricey computers, iPods tended to be competitively priced; new products such as the shuffle and the nano have set new, lower price levels for competing products.

"Apple is looking to get as favorable pricing as possible," said Unsworth, noting that getting even lower prices through an investment in a fabrication plant could help Apple "squeeze their competition."

Though the Samsung deal seems to have fallen through, some analysts expect the company to sign another deal either with Samsung or with one of the chipmaker's rivals, such as Micron Technology (MU Quote) or Hynix Semiconductor.

Indeed, a deal with one of Samsung's competitors is more likely than a deal with Samsung, analysts say. Samsung has enough resources to not need Apple's money to invest in further flash capacity, they note.