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Apple eyes flash startup Anobit

Anobit might be the next solid-state storage vendor to get scooped up. Israeli publication Calcalist reports that Apple is in “advanced negotiations” to acquire Anobit for around $400 million to $500 million.

Apple uses Anobit’s mobile flash chip in the iPhone, iPad and MacBook Air laptop. Anobit also sells an enterprise-grade multi-level cell (MLC) flash controller, the Genesis SSD. Anobit launched the second-generation Genesis product in September. The startup claims its proprietary Memory Signal Processing (MSP) controllers can boost endurance levels so that consumer-grade MLC can be used in the enterprise.

While Apple would likely focus on Anobit’s mobile flash controller, it might also use Anobit’s enterprise flash to enter that competitive market. The acquisition continues a trend of consolidation in the SSD market this year. SanDisk acquired Pliant in May for $327 million to move into the enterprise SSD market, and LSI bought flash controller startup SandForce for $322 million in October.

“We believe this yet again highlights the importance of controller technology in the SSD market,” Stifel Nicolaus Equity Research analyst Aaron Rakers wrote in a note to clients today. “While it appears that a potential acquisition of Anobit … would likely leave investors primarily focused on Apple’s ability to leverage the MSP controller technology across its product portfolio, we believe Anobit’s enterprise-class controller capabilities must also be considered/watched with regard to competition against Fusion-io (albeit there have yet to be any signs of Anobit playing in the PCIe SSD market).”

Anobit, which came out of stealth in 2010 with its first Genesis product, has raised $76 million in funding.

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