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Will the cloud curb interest in 64GB IPad 2?

Lucas Mearian | March 4, 2011
With consumers increasingly turning to cloud service providers for data storage needs, analysts say buyers might opt for 16GB or 32GB models instead of the top-end 64GB iPad 2.

FRAMINGHAM, 4 MARCH 2011 - With consumers using the cloud service providers more often for their data storage, analysts are raising the prospect that iPad 2 buyers will look to save money by getting versions that have less on-device storage.

The trend of purchasing mobile devices with lower-capacity SSDs, or NAND flash memory on a board, is borne out among manufacturers. Many of the largest vendors have introduced lower capacity "value" models over the past year. Value SSDs retail for about $100, compared to 128GB or 256GB versions which can cost five times that amount. For example, Intel (INTC) introduced a 40GB X25-V SSD that sells for for $92 on sites such as .

Pricing for the iPad 2, which goes on sale March 4, begins at $499. For that, you'll get Wi-Fi connectivity and a 16GB SSD - or to be more technically accurate, 16GB of NAND flash storage on a board. If you want to quadruple that capacity with a 64GB SSD, you'll pay $699. Models that offer both Wi-Fi and 3G connectivity are priced from $629 to $829.

"I'd consider the 16GB version [of iPad 2] and save myself some money, because so much data is not stored locally these says," said Jude Olinger, the CEO of The Olinger Group, a market research firm based in New Orleans. "Why get a 64 GB? With Pandora [streaming music service] and cloud services, I'm not using internal storage all that much."

Olinger's company deployed nearly 300 first-generation iPads last April for taking shopper surveys in dozens of retail malls. He wants to buy up to 20 iPad 2s, partly to use FaceTime video chat for connecting survey respondents directly to experts in the home office. Even for company use, it might not be necessary to have so much data stored on each device, he said.

"Even though we hear content is expanding exponentially ... a lot of it's not stored on the hard drive," said Jim McGregor, chief technology strategist at market research firm In-Stat. "You can get to a point where SSDs just make sense, especially on mobile PCs."

"Even digital home products like Apple's (AAPL) new Apple TV switched from having a hard drive to just using a streaming model," he added. "All the other home devices we're seeing coming out are going the same way. You don't have to store that information, you just have to be able to access it and buffer it. That's a significant change over the past few years in the use of the cloud."


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