By Katie Marsal

Published: 09:55 AM EST

Apple's iPhone and iPods use so much NAND flash memory that there is a worldwide dearth of memory chips; and negotiations with China Mobile for the iPhone are ongoing.

Flash memory supply prioritized for Apple

In a new report from DigiTimes, Taiwanese memory module makers said there have been a "serious shortage" of NAND flash chips, as companies provide more and more of their supply to Apple. Industry sources said memory providers will limit the supply of memory provided to companies other than the Cupertino, Calif., hardware maker.

"Samsung Electronics has informed Taiwan module makers that it will halve its NAND flash memory to them in September, and Micron Technology has also told some of its downstream customers that no NAND flash chips are available, claimed the sources," the report said. "Toshiba and Hynix Semiconductor are also giving priority to Apple, and are offering limited supply to the spot market, the sources added."

The average price for a 16GB chip was $4.48, up 7.2 percent in the first half of September. 32GB also rose 4.3 percent to $6.80.

Last week, Apple unveiled a new 64GB iPod touch for $399, doubling the capacity of its previous highest capacity 32GB model. In addition, this summer the 16GB and 32GB iPhone 3GS models were introduced.

As Apple has continued to double its available capacities on the iPhone and iPod touch every year, competitors have struggled to keep up. This week Microsoft will release its new Zune HD, available with flash memory capacities of 16GB and 32GB.

If true, the latest report from DigiTimes could suggest that competitors, like the Zune HD, have been unable to offer the capacity of the iPod touch because memory suppliers simply will not provide enough product to anyone other than Apple.

Report reaffirms Apple negotiations with China Mobile ongoing

China Mobile, the world's largest wireless provider, remains in negotiations with Apple to bring the iPhone to its network, a new report from The Wall Street Journal states.

The company's chairman said talks are ongoing, confirming previous reports that Apple is looking beyond its deal with China Unicom. Though Apple entered into a three-year deal with China Unicom last month, that agreement was non-exclusive, paving the way for the iPhone to potentially appear on other carriers.

Of China's estimated 700 million mobile subscribers, China Mobile is by far the largest, with more than 475 million customers. China Unicom has an estimated 141 million subscribers. Later this year it will offer a new model of the iPhone that does not have Wi-Fi. The carrier has plans to offer 3G access in 335 cities before 2010.