The rumor is now official: Apple, the world’s largest consumer of flash memory, has paid $500 million for consumer-grade flash memory maker Anobit. The move solidifies Apple’s supply of solid-state memory used by the iPhone, iPad, iPod and MacBook Air. The half-billion dollar price tag tops the inflation-adjusted $472 million acquisition of NeXT back in 1997.
The deal is seen as giving Apple a key advantage over rivals. Not only do many Apple devices rely on flash memory for storage, the Isreaeli-based Anobit manufactures the sort of inexpensive MLC flash memory that can keep device costs down. In a perfect trifecta, the purchase gives Apple access to technology which improves MLC flash memory reliability – i.e., cheaper solid-state memory that is more reliable than other suppliers.
As computers grow faster and smaller, flash memory is increasingly seem an the answer. Anobit’s technology could turn flash memory’s main drawback – cost – into a positive for Apple. Anobit’s technology will also reduce another negative for flash memory: battery usage. In a sign of the importance Apple places on the deal, the tech giant reportedly will build a research center in Israel, the first outside the United States.
By purchasing Anobit, Apple could take a relatively nondescript industry and apply its Midas touch. While consumers thinking of a tablet or notebook would have to wonder about quality from some other flash memory vendor, buyers would flock to Apple flash memory endowed with the same halo that lifts other iProducts.
The Anobit purchase is likened to NeXT in size. However, the acquisition could also be compared by their landmark results. NeXT brought us Steve Jobs as CEO. The Anobit buy could give Apple another valuable resource for years to come.