NAND flash memory, which stores photos in digital cameras and music in iPods, has considerably decreased in price and is likely to be used in gadgets more and more in the coming year. Devices that will benefit from the cheaper memory include SD cards, which will boast greatly expanded storage capacity, USB flash sticks, internal storage and new, lower-cost SSDs for notebook computers.

The price of mainstream 4GB single-level cell (SLC) NAND flash memory chips has fallen 73 percent since mid-August to $4.96 (£2.50). According to DRAMeXchange Technology, which runs an online clearinghouse for the chips, the chips hit an all-time high of $18.50 (£9.25) on August 14. The price of 4GB multi-level cell (MLC) NAND flash chips has also fallen. They are down by 75 percent down to $2.23 (£1.12) compared to its summer high of $8.85 (£4.43) per chip.

The difference between SLC and MLC is cost and life span. SLC costs about three times more than MLC but has a lifetime of 100,000 write cycles whereas MLC has a lifetime of only 10,000 write cycles.

Toshiba and Samsung have both developed new 128GB SSDs based in MLC NAND to expand their use in notebook PCs. The new SSDs are less expensive, giving notebook PC designers more choices in storage.

"At 128GB, you're giving consumers the kind of storage space they expect in a notebook," said Jim Elliott, director of flash marketing at Samsung.

To work around the lifespan issue, Toshiba and Samsung use controller chips to spread writes across the drive to avoid wearing out any one portion too quickly.

The new MLC-based drives are an important step forward for SSDs in the battle against hard disk drives (HDD). At 128GB, an SSD could replace a HDD in laptop computers because they're lighter, more rugged, consume less power, make no noise and enable a computer to start up and load software faster than HDDs. But SSDs are a lot more expensive than HDDs, which is why they're mainly used in the business laptop market, where users are willing to pay more for performance and reliability.

Elliott believes SSDs for PCs will account for 27 percent of NAND consumption by 2011, particularly in business laptops and mobile devices.

SanDisk has taken a slightly different route in SSDs than Toshiba and Samsung. The company made a 72GB SSD, which is thinner than its counterparts and is aimed at mobile devices. According to Iri Trashanski, director of strategic business development at SanDisk as the drive takes up less space, it could be used in a range of mobile devices. He doesn't believe there will be a market for 128GB SSDs for a while.

NEXT PAGE: The effect flash memory will have on mobile phones

The decrease in cost of NAND flash memory will see its use in a number of different gadgets increase over the coming years. But just what products are likely to feature the memory and how will consumers benefit?

Brian Kumagi, senior business development manager for NAND flash memory business at Toshiba, believes the lower cost of MLC NAND chips will play a major role in seeing 128GB SSDs gain a market share.

Toshiba is also offering MLC NAND SSDs in 32GB and 64GB capacities to entice laptop PC makers and makers of digital music players and other devices requiring more storage.

There are several other products where companies are adding NAND flash to increase storage capacity and improve devices. One, thanks to Apple's iPhone, is handsets, said Elliott.

Multimedia handsets will likely see 8GB of embedded flash memory become the standard this year, and card slots are being added to a host of mobile phones to increase storage and for added content delivery, including movies, games, software and more.

Low prices are encouraging new innovation, just as low NAND prices helped put the chips into more iPods earlier this decade. One area is video cameras, namely, flip video and similar devices. For $119.99 (£60) users can buy a flip video camcorder that uses NAND flash memory to store 30 minutes of recordings. In addition, devices such as GPS for cars will need more flash when 3D digital maps start replacing 2D maps.

The good news for users is that there are so many NAND flash memory makers in the world today that prices will remain low or at least reasonable for a long time.

In his "Flash to crash" report, Macquarie Securities chip analyst Warren Lau highlighted that NAND flash memory prices are expected to remain low throughout the first half of this year.

"We continue to warn that NAND flash will see excess supply in the first half of 2008 owing to aggressive production ramp (at IM Flash and Toshiba) and the seasonally weaker period for consumer products (digital still cameras, handsets and MP3)," he said.

Much of the possible price movements in NAND flash actually depend on Apple because of the widespread popularity of the iPod and iPhone. The company announced it has already shipped over 4 million iPhones and continues to ramp shipments. According to IT research company Gartner, iPod shipment growth has dropped but higher capacity iPod products such as the Touch have done well in the market.

"Apple is a critical driver of NAND flash consumption and will continue to yield great influence on NAND flash vendors," said a spokesman for the company.