Flash memory will overtake the portable media player (PMP) sector this year, winning 65 percent of the worldwide markets, according to the research firm iSuppli.

After dominating the PMP market since its inception, traditional HDD-based PMPs will account for only 35 percent of shipment sales this year, down from 78 percent in 2006.

"NAND flash costs are nearing a point where makers of MP3 music players can add enough capacity to support video content, which requires significantly more storage than audio," explained Chris Crotty, senior analyst.

The average cost of NAND flash memory will decline by 47.1 percent per year through 2010, he said.

The company predicts that by 2008, 96 million flash-based PMPs will ship worldwide compared with 32.1 million HDD-based models. This year, 54.8 million flash-based units are expected to ship globally compared with 29.3 million HDD models. North America is considered to account for at least 30 percent of the worldwide market, estimated Crotty, who said the flash/HDD ratio for the U.S. is essentially the same as that of the worldwide market.

The advantages of NAND include longer battery life and smaller size. The advantage of HDD is that it is less expensive than NAND, but it has a shorter battery life and is more susceptible to mechanical failure.

iSuppli predicts Apple will begin offering video capable, flash-based iPods following the release of the iPhone, due in stores June 29.