Apple gets flash... rivals don't really care

When IBM entered the PC market in 1981, Apple took out a full-page newspaper ad welcoming its rival.

Today, with Apple reportedly poised to debut its first flash-memory-based music player after rocking the market for hard-drive devices with the iPod, some competitors are taking a similar laissez-faire stance.

Thomson vice president David Arland, whose RCA brand is among the top three in US retail sales, said: "Welcome to the party."

Apple, of course, ended up ceding the bulk of the PC market to IBM and other PC makers. But Thomson and others say they hope an Apple flash player will ignite sales for all concerned.

Dan Torres, Rio's vice president of product marketing, said: "When they've come in, they've always raised the water level. That's good for the industry."

Torres sees a flash iPod as a fait accompli, noting that suppliers in Asia have said Apple has been making purchases consistent with the development of a flash music player.

"We've been monitoring this for a while," Torres said. "We believe that it is not a rumour; we believe it is very true."

Apple is widely expected to announce a flash iPod at Macworld in January. But for now, the company has declined to comment.

Financial analysts predict Apple would sell millions of flash iPods in short order. Bear Stearns analyst Andy Neff predicted earlier this month that Apple will sell six million units in the current fiscal year and 13.5 million the following year, but at $160, a lower average price than Apple gets for its iPods.

Looking ahead to next year, Neff forecasts Apple may be able to grab 30 pe rcent of the 34 million players that market researcher IDC estimates will sell next year.

One challenge for Apple may reflect the words of the company's own CEO, Steve Jobs, who has characterised the current market for flash-based players as made up largely of products people get as gifts and never use.

But the landscape may be shifting, thanks in large part to memory becoming available at lower prices and in higher capacities.

Michael Maia, co-founder and vice president at Portal Player, the company whose chip powers the iPod, said: "We're finally seeing individual flash devices now at the eight-gigabit (1GB) density, which is starting to get pretty significant. With that, in terms of just the economics, it's going to help get the prices down."

Ina Fried writes for CNET News.com.