Sony Aims to Make Memory Stick Stickier
Consumers will see more new gadgets using
Sony on Monday invited licensees of its Memory Stick to the Memory Stick Partners' Forum, the first event to encourage them to make more products that use the format.
Since the launch of Memory Stick in September 1998, the company has licensed the hardware and media specifications to 157 companies worldwide. But not many have developed Memory Stick-compliant products so far.
At the end of fiscal year 2000, Sony had shipped 7 million Memory Sticks, some 3 million short of a target it set a year ago. Despite this, at the forum the company predicted cumulative shipments of 125 million cards by Sony and its partners in 2003, and said it had high expectations of growth.
A recent partnership with Motorola is one of the bright prospects Sony is holding out for Memory Stick's near future. Five days before the forum, Motorola announced its plan to license Memory Stick as a new peripheral addition to its Dragon Ball range of microprocessors, used in many personal digital assistants.
In addition to this partnership, other licensees are expected to announce Memory Stick compliant products before year's end. These are expected to include several audio and computer-related products, and PDAs by a non-Japanese maker, says Yutaka Nakagawa, Sony's corporate senior vice president.
"The [Memory Stick] medium had been considered just another kind of memory card," he says. "When the PC market slowed down, the [licensee] companies that had been selling products only to corporations realized they should expand business into the consumer market. And recently, in order to approach that market, some of them started developing Memory Stick products based on its capability to work across many devices," he adds, explaining the reasons for the company's sudden expectations after two and a half years of struggle.
Memory Stick is best known for its data storage/transfer usage, especially on Sony's digital still cameras and video camcorders. This accounts for 50 percent of current Memory Stick use, according to the company.
However, Sony hopes the format will be used more as an interface connector for consumer electronics such as digital still cameras and GPS (Global Positioning System) units. Two such adapters have already been designed for
"At the moment, Memory Stick is more or less evenly competing with other memory cards," says Ryoji Sato, general manager of Memory Stick Business Center for Sony. "But it will change when GPS comes into the usage of Memory Stick."
In addition to the current formats, Sony announced the launch of Memory Stick ROM, expected in June this year. It hopes the new format will win support from companies who want to distribute data such as music samples, because users won't be able to change the contents and it is cheaper to produce than current rewritable cards.
Memory Stick's biggest potential rival is the SD (secure digital) memory card. Developers SanDisk, Toshiba, and Matsushita Electric Industrial expected it to become a global standard for memory cards when they unveiled it in August 1999.
Nakagawa says Sony doesn't view SD as a direct competitor. "There is a 'SD versus Memory Stick' concept formed by the media but Memory Stick has a 25 percent global market share, while SD only has a 2 percent."
That global market share of 25 percent is the result of a sudden increase in the third and fourth quarters of last year, according to Sato. "And the increase is accelerating," he says. It will encourage licensees to develop Memory Stick-compliant products without any risk, he said. Currently the company produces 700,000 to 800,000 cards per month.
Its current maximum capacity of 128MB will be upgraded to 256MB in 2002 and 1GB in 2003, according to the company's plan. However, there is one more issue that Sony has to tackle, if it really wants to dominate the market: Memory Stick's price.
In Tokyo's Akihabara electronics district, Smart Media and Compact Flash, two other
"Like what has happened to DRAMs, we are hoping its cost will go down as the production increases," Nakagawa says.