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Wu said in a note to investors that he has received more than one indication that Apple is building a lightweight laptop that will use flash, rather than a hard disk drive, as its main memory. However, its release is dependent on a fall in Nand flash prices.

'This is a new subnotebook form factor that will use Nand flash as primary storage,' he wrote. 'Our sources indicate that Apple would like to introduce the product to further capitalise on its strong MacBook growth, but timing will

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be dependent on Nand vendors' ability to drive down pricing further, making it economically attractive for Apple.'

Wu said that if this happens then Apple hopes to release the laptop in the second half of 2007.

He added that Apple's appetite for flash memory will eventually see it replace the HDD in the video-enabled iPods.

'Our sources indicate that while Apple plans to migrate the rest of its iPod product line to Nand flash from HDDs (the current vPod is the only model remaining), fairly low price points and customer appetite for high storage capacities will likely prevent this from happening until late 2007-2008,' he wrote.

Certainly the price of flash memory has to fall significantly before it can compete with the equivalent HDD. Currently 32GB of flash costs $160, more than seven times the price of the same amount of disk capacity.

In the interim Wu expects a widescreen iPod to be introduced once the iPhone has started shipping in June plus increased capacities for the video iPod range, which currently comprises 30GB and 80GB models.