Showing some flash

There’ll be sparkles on most Christmas trees this year, but for some people there won’t be enough flash.

Flash memory cards, that is, those indispensible packages of solid state storage that digital cameras fill so quickly. Along with USB keychain drives, they’ll make great stocking stuffers

(or Chanukah gifts).

But there’s a supply problem lately caused by the falling price of NAND memory components, the essential elements of the cards. It’s great news for consumers looking for cards with 128 MB of storage and more, who’ve never seen prices so low and capacities so high.

For the 12 months ending in September, Canadians spent $58.8 million on flash memory, including USB drives, according to the NPD Group.

“”The demand for flash drives is very high,”” reports Howard Hart, vice-president of the computing division of Hartco Corp., whose franchises include the Compucentre and CompuSmart retail chains.

“”Sales from last year to this year have at least doubled.””

But it’s also pushed demand to manufacturing limits.

“”USB pen drives are in very short supply,”” says Hart. “”In fact all memory is in short supply. We’re having trouble getting enough for the Christmas season.””

“”The market is extremely tight,”” agrees Brian Kaumagai, business development manager for NAND flash components at Toshiba America Electronic Components, one of the leading flash chip makers in the world, along with Samsung Electronics.

Buyers around the world are expected to spend US$2.75 billion on flash cards alone this year, according to Gartner Inc., up from $1.9 billion last year.

But here’s something resellers can cheer about: By 2007 the spend will hit $4.59 billion, which represents a compound annual growth rate of 18 per cent.

The popularity of flash drives (also called key or pen drives) is soaring as a way to share files merely by plugging into a computer’s USB port.

Sales are being boosted not only by increased capacities but also features such as the ability to play MP3 files and security protection with thumb-print readers.

And as the cost of memory drops and capacities rise, manufacturers are finding new formats and new uses for flash cards, putting them in everything from video cameras to cellphones for expandability.

According to Toshiba, flash cards will hold up to 8GB of memory by 2006. “”Flash densities are becoming an enabler for new applications,”” said Kaumagai, “”allowing the next step — use in digital video, which requires high performance.””

So cards that have up to 1GB of storage, which will be hitting stores in volume in 2004, will be appreciated in digital flash video cameras just entering the market from manufacturers such as Panasonic, JVC and Samsung.

SanDisk Corp. of Sunnyvale, Calif., one of the leading manufacturers and distributors of flash products, says it will make new product announcements for its premium Ultra line at U.S. trade shows early next year.

Most cards are used in digital still cameras, but there’s another trend: trying to leverage a format across a company’s product line. That’s why Toshiba Corp., one of the major backers of the SD (Secure Digital) card, is beginning to add slots for that card in its notebooks, so users can easily move from camera to editing images.

The biggest cross-over pusher is Sony Corp., creator of the thin Memory Stick, which has put slots for the device in everything it makes from TVs to handhelds.

Earlier in the year it released the Memory Stick Pro, which takes the format’s capacity above 128MB and increases transfer speeds to approach video needs.

“”We want to promote the ‘connect and create’ atmosphere moving into the digital broadband era,”” said Neil Dutton, a product manager at Sony of Canada Ltd.

Unfortunately, consumers like hardware smaller, so in 2004 retailers will see recently introduced micro formats such as Sony’s Memory Stick Duo and SanDisk Corp.’s Mini-SD card muscle their way into the Canadian marketplace in new devices such as necklace MP3 players and mobile phones.

More incompatible formats, say many resellers and consumers, is not what the market needs. There are now ten of them if you include the PC Card, which is waning; the MultiMedia Card (mainly for mobile phones); CompactFlash; SmartMedia; xD Picture Card (backed by Fujifilm and Olympus); two versions of SD (backed by SanDisk, Toshiba and Panasonic) and two versions of Memory Stick.

In the format war, alliances are vital. So, for example, Fujifilm just signed an agreement to make xD cards with California-based SanDisk, one of the leading manufacturers and distributors of flash products. SanDisk says it has presence in some 50,000 retail chains around the world.

However, according to Gartner analyst Joseph Unsworth, there will only be two survivors: SD because it combines small size, performance and is backed by two electronic giants; and Memory Stick, because of Sony’s reach into consumer electronics.

That will take several years. According to the NPD Group, this year 36 per cent of flash cards bought by Canadians were CompactFlash, followed by SD cards with 25 per cent of the market and Memory Stick with 16 per cent.

But Wes Brewer, SanDisk’s senior director of retail product marketing, noted that this year SD cards this year will account for 35 per cent of its worldwide sales, up from 20 per cent last year. That suggests SD will catch the market leader in the near future.

As for production problems, according to Unsworth, there are several newcomers looking to challenge Toshiba and Samsung’s manufacturing dominance.

Presumably they don’t want to be a flash in the pan.

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Jim Love, Chief Content Officer, IT World Canada

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including ITBusiness.ca and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@] soloreporter.com

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