Storage and memory are two important places where everything happens in a computer. Storage comprises hard drives, solid state drives, etc., which hold programs and data. The primary attribute of storage is that it retains its content when the power is turned off. Storage is "non-volatile."
Memory is made up of RAM chips, which can typically be expanded in a desktop computer but not in a phone or tablet. In contrast to storage, memory (RAM) loses all of its content when the power is turned off. Memory is "volatile."
When an application is run, the software and data are copied from storage to memory (RAM), and memory is where all calculating and comparing take place. See byte addressable
A Lot of Confusion
What has caused the most confusion with these terms is that several common storage devices use "flash memory" chips (see below). Consequently, people think storage and memory are the same. To avoid all confusion, refer to "storage" and "RAM" rather than storage and memory. For more details, see storage
and storage memory
STORAGE DEVICES (Non-Volatile)
hard drive (magnetic disk)
solid state drive (flash memory)
USB drive (flash memory)
SD Card (flash memory)
CompactFlash (flash memory)
CD-R (optical disc)
DVD-R (optical disc)
DVD-RAM (optical disc)
magnetic tape (tape cartridge)
MEMORY CHIPS (Volatile)
dynamic RAM (DRAM chips)
static RAM (SRAM chips)
The Traditional Terminology
This Engadget blog described a Kindle tablet using the storage/memory definitions that have been used for decades.
They're All Chips
Memory Is Not Storage, But So What
The RAM chips (top) and the storage chips (bottom) in a USB drive and CompactFlash card (cases removed) may look alike, but RAM chips are fast and volatile, while storage chips are slower and non-volatile. See memory module
, USB drive
Because "memory" implies permanence to non-technical people, the word is used for storage by countless vendors, big and small.
To learn how memory and disk caches work, see cache
. SSDs are faster storage than hard disks (see solid state drive