September 5, 2001 6:00 PM PDT

SanDisk picks up the Stick

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SanDisk, the U.S. leader in flash memory cards, has become the latest company to get behind Sony's Memory Stick.

On Wednesday, SanDisk said it will buy Memory Stick flash memory cards and rebrand them under its own name. Sunnyvale, Calif.-based SanDisk held the top spot in the U.S. flash memory card shipments last year with 31 percent market share, according to research firm IDC.

Memory Stick is one of several competing flash memory formats. Its rivals include CompactFlash, SmartMedia and Secure Digital. SanDisk also manufactures and sells other flash memory formats, such as CompactFlash.

Flash memory is used as storage in gadgets such as handheld computers, MP3 players and digital cameras.

Sony has slowly but surely moved up the flash memory ranks since it introduced Memory Stick three years ago. It doubled its market share in flash memory cards last year to 13.8 percent of the market, compared with its 6.7 percent share in 1999. At the end of 2000, IDC said, Sony held the No. 3 spot in the flash memory card market. Toshiba was No. 2.

"Sony has been working to build up alliances and make Memory Stick a standard, and it has been paying off," IDC analyst Jim Cantore said.

Lexar, another flash memory card maker, also manufactures Memory Sticks under its own brand.

To help boost the popularity of its format, Sony has been aggressively signing up partners and licensees. Earlier this month, Sony struck a deal with consumer electronics titan Samsung to develop products that will use Memory Stick.

SanDisk hopes to increase its own sales by building off Memory Stick's momentum.

Sony sells 8MB to 128MB Memory Sticks. Next year, the company expects to release a 256MB version, followed by 1GB and 2GB versions by 2003. Sony also plans to boost data transfer rates from the current 2.5MB per second to 20MB per second by 2003.

As part of the deal, SanDisk and Sony will work together to develop, manufacture and sell future Memory Stick capacities.

"Anything tying the two companies closer together would help Sony to continue to accelerate its market share growth," Cantore said.

 

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