Toshiba has unveiled its 64GB embedded NAND flash memory module that would take the limit for portable gadgets to the next level. Currently the best available option is the 64GB iPod touch that uses 2x 32GB chips. So its safe to assume that Apple will now have its eye on this new chip from Toshiba that lets Apple double the iPod touch / iPhone memory to up to 128GB!
These new chips combine 16 32Gbit NAND (each equal to 4GB) chips using 32nm process, while the chips also integrate a dedicated controller. Hope the Q1 2010 availability by Toshiba helps the iPhone 4G, which according to reports is already licensed to Foxconn for production.
Apple is cannibalizing the sales of its iPod line with iPod touch and other flash iPods. To replace the iPod classic with a 120GB HDD, they would need such high capacity chips. We can totally expect Apple to go this route and get a 128GB iPhone / iPod touch some day. The only question is, when? How long before that happens?