Prices are expected to decrease over the next three years due to continuing technological innovation; input costs for suppliers are expected to continue falling and contribute to decreasing prices for flash memory devices
Los Angeles, CA (PRWEB) November 16, 2014
The flash memory device market has a buyer power score of 4.0 out of 5, with a higher score representing stronger negotiation conditions for buyers. “Buyer power is strengthened by buyers' access to a wide variety of comparable suppliers and products, and historically decreasing prices. However, reduced opportunity for negotiation on prices from suppliers and the fact that these products are rapidly falling into obsolescence are reducing buyer power,” according to IBISWorld business research analyst Pierre Dessertenne.
Due to their practicality and low cost, demand for flash memory devices has been rising, particularly from the information technology sector. Flash memory is the storage medium of choice used in small electronic devices and for storing large quantities of data in a convenient nonvolatile format. As a result, many suppliers sell flash memory devices for varying uses. Flash memory device manufacturing has a low supply chain risk as a result of reliance on abundant raw materials, namely silicon. Shortages and long buying lead times are therefore extremely rare for flash memory devices.
Although there are many suppliers in the market, makers of memory chips, the central component of any flash memory device, are less numerous, granting them the ability to control prices, diminishing some buyer power. Nevertheless, memory chips are extremely similar across suppliers and thus offer little potential for product differentiation. Instead, suppliers must compete on price, which pushes their margins down and prevents buyers from negotiating more favorable pricing. Manufacturers also compete on the specifications of their flash memory devices regarding the controller and firmware. There are close to 900 flash memory device makers in the market, with the majority purchasing memory chips from the few large chip manufacturers. The top four suppliers (Toshiba, Samsung, SanDisk and Micron) account for more than 70.0% of the market.
Prices for flash memory devices have been falling consistently for the past three years and are expected to do so for the next three years. Issues regarding the cost of inputs and overhead have less influence on the price per gigabyte than innovation. Flash memory devices have increased in performance and capacity ever since their inception. “As a consequence, buyers can expect prices per gigabyte to keep falling. Because flash memory devices continuously decrease in price and have a low risk of shortages, buyers can purchase them whenever they are needed,” Dessertenne says. For more information, visit IBISWorld’s Flash Memory Devices procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of flash memory devices. Flash memory equipment is used to store digital information in a variety of electronic devices, including digital cameras, mobile phones and laptop computers. Because they are nonvolatile, flash memory devices do not require a power source to retain data. They can also be easily erased and reprogrammed to suit a user’s needs. This report does not cover other types of removable storage media, such as CDs, DVDs or Blu-ray Discs.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.