Toshiba Corp, Japan's second largest chipmaker, has agreed to start selling a type of semiconductor known as flash memory to Apple Computer Inc, maker of the best-selling iPod digital music player.

Toshiba, based in Tokyo, will start selling the memory chips to Cupertino, California-based Apple "early next year," Yasuo Morimoto, senior executive vice-president at Toshiba said. His comments come amid speculation Apple will unveil a flash-based iPod in January.

IPod, which accounted for 23 per cent of Apple's sales, is the world's best-selling music player equipped with a hard-disk drive.

Flash-based players, which store music on memory cards instead of drives with moving parts, allow for more shock-resistant, sleeker designs.

Apple may introduce a flash memory iPod at the MacWorld Expo trade show in January in a bid to introduce its iTunes music store and other features to a wider audience, Steve Milunovich, an analyst at Merrill Lynch & Co Inc in New York, wrote in a report on November 29.

"The land grab is on," Milunovich wrote. "We believe consumers will hesitate to switch once they become accustomed to the iPod's scroll wheel or have purchased a number of iTunes."

Apple's flash memory iPod will sell for US$149 to US$199, Milunovich wrote. Apple's lowest-priced iPod, which has a 4-gigabyte hard drive, currently retails for US$249.87 on Amazon.com.

The market for flash memory music players is five times as big as the hard-drive market by unit sales and double its size by revenue, according to Milunovich.

Takashi Takebayashi, Apple's Tokyo-based spokesman, declined to comment.

Apple may sell 4 million iPods in the three months ending December 31, beating its 3.5 million unit forecast, according to Milunovich.

Profit more than doubled to US$106 million from US$44 million during the three months ended September 30, Apple said on October 13. The company shipped 2.02 million iPods in the quarter, up from 336,000 a year earlier, Apple said.

Toshiba already supplies Apple with 1.8-inch hard drives for use in larger iPods models such as the 40-gigabyte version that can store 10,000 songs. Hitachi Ltd supplies 1-inch drives for Apple's iPod mini, which stores about a 1,000 songs.

(China Daily 12/10/2004 page11)