The growth in cloud-based storage services is dialing back the need for more on-board storage in mobile devices.

Researchers with analyst firm IHS said that over the last year, the growth in the average amount of on-board memory in smartphones has actually declined over 2012 levels as vendors appear to have at least temporarily reached a “sweet spot” for handset storage.

Analysts believe that as cloud storage and backup services are becoming more popular, users are seeing less of a need to keep large data archives on their devices. As such, what was a three-fold increase in handset storage between 2011 and 2012 shrank from and average of 13.2GB per device to 12.8GB in 2013.

Handsets are not the only mobile sector to have hit a growth plateau. Researchers found that tablet manufacturers experienced an even bigger dip in storage demand. Over the course of the year, IHS teardown reports found that on average tablet vendors used 25 per cent less storage as average capacity fell from 32.1GB to 24GB.

While the report is good news for cloud service providers and mobile device vendors who are looking to keep costs down, the dip could also spell disaster for one corner of the semiconductor industry. With slowing demand for the NAND memory chips used in mobile storage, some memory vendors could see their bottom lines take a big hit.

“Mobile device brands increasingly are offering their own application ecosystems and online storage benefits that perform the same functions as onboard NAND flash,” said IHS memory and storage analyst Ryan Chien,

“With mobile platforms a leading growth driver for the NAND industry, this trend represents a major cause of concern for flash memory makers.”