Demand Concerns Threaten a Flash Fizzle

Wielding the price ax is a practice that has served flash memory makers well thus far, allowing flash sales to continue growing at a phenomenal rate.

The goal of the price cuts is not just to get consumers to buy more flash, says Handy, but to entice them to use flash for different applications -- much as people now rely on USB flash drives rather than floppy discs to back up their computer files.

"By lowering the price, they're causing new markets to happen," says Handy.

While flash has already gained acceptance in digital cameras, cell phones and MP3 players, there is potential for flash to make strides as an alternative to rewriteable compact discs, as well as to gain a foothold within notebook PCs, say analysts.

So long as flash memory can find new markets to invade, consumers may continue to find ways to use all the chips being produced.

But once the field of opportunity runs dry, flash-makers' luck may run out.