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Apple cuts expected flash memory spending by $200M

We knew Apple was holding back on flash purchases this year amid a slowing economy, but iSuppli has managed to put a number on the shortfall.

Apple has cut its 2008 flash memory orders by $200 million, according to iSuppli, setting up a down year for flash vendors.

In February, iSuppli reported that Apple was slashing its orders of flash memory amid a weakening economy, but iSuppli wasn't sure exactly how far the cuts would go. After crunching the numbers, iSuppli now expects Apple to spend $1.4 billion on flash this year for iPods and iPhones, up 12 percent from $1.2 billion last year. But the analyst firm, and the flash memory industry, had been expecting much more purchasing out of Apple, at least $1.6 billion.

The overall flash memory market is in turmoil, as overcapacity and slowing demand come together at the worst possible time. Plunging flash memory prices are expected to dent Intel's first quarter, among other companies likely to be affected. iSuppli projects that the entire market will grow just 9 percent this year to $13.9 billion, down from previous expectations of 27 percent growth to $17.9 billion.

Last month, Digitimes reported that Apple had yet to make a significant flash memory purchase in 2008, as it worked down through their existing inventory.