NAND flash memory supplies constrained (again)

Agreed. I won't be surprised at all if Apple retires the iPod Classic in September of this year and rebrands the iPod touch as just THE iPod.

I'd like to see the "Classic" get all the features of the Nano, but maybe with 128GB of flash instead of disk. That would make it thinner, and improve battery life. They could even squeeze in a bit bigger battery if they wanted.

Classic has a purpose... it's the best music player for one reason... the ability to operate it one-handed without looking. That's also why Nano is so popular. Apple has tried to add this to touch devices via the silly headphone controllers, but the Classic iPod has sleak, simple navigation that's exactly correct for what it does.

Not crazy at all if you've ever heard about Moore's Law.

Apple's deal with Toshiba gives Apple the advantage against its competitors. Who is going to pay more for spot memory prices? The competition.

Electronics manufacturing is gambling. Essentially the big players put in massive orders for CPUs, ram, hard drives, flash, etc. and those order are "bread-n-butter" for the manufacturers. What's left goes to "everybody else" via the spot market... often left over runs go for cheaper. This is why ram at your computer store is usually way cheaper than Dell or Apple... but Dell and Apple have contracts in place to keep THEIR price fixed all year, they don't suddenly find themselves paying 20$ more per ram stick like local shops do.

This goes back to Jobs statement that "cash is king". Apple is paying hundreds of millions of dollars for these contract up front to be first in line when the supply lines get tight. If other OEMs don't like it they're more than willing to pony up $100M -$500M like Apple has for the newest technologies.