SanDisk Joins Sony over Memory Stick

Sony won a minor victory in the memory media debate on Wednesday when flash memory giant SanDisk agreed to supply Sony with flash memory for its Memory Stick products. Sony will supply SanDisk with finished products for resale.

The deal also calls for the two companies to work together on development and separate manufacturing of next-generation Memory Stick media. Those cards are expected to appear in the "near future," according to Sony spokesperson Atsuo Omagari. He would not disclose details of the new cards, although he says they would operate at higher speeds and have capacities of "several gigabytes."

For Sony and its millions of Memory Stick users, the deal means a third source for the chewing-gum sized memory cards. In addition to its own cards, Lexar Media began selling Memory Stick shortly after Sony made a $2 million investment in the company in April 2000.

Memory Medley

The deal gives SanDisk a new customer for its flash memory chips; the company can now complete its product line and boast it sells media for each of the major memory card formats.

"It's something we want to offer to our customers because they have been saying they want Memory Stick," says Mike Wong, a spokesperson for SanDisk. "Memory Stick has been selling very well; I think Sony has sold over 7 million since its introduction. There is certainly a lot of demand."

The card competes with SanDisk's own Compact Flash and MultiMediaCard, which was developed by the company with Toshiba and Matsushita Electric (Panasonic), but the agreement, and SanDisk's work on a next-generation Memory Stick, won't affect those cards, Wong says. "This is an addition to our product line. It won't supersede any of our existing products."

Falling Prices Add Choice

The turbulent memory chip market, which is seeing all-time price lows at present, is proving a boon for consumers who can find media for cheaper prices than ever before, Wong says.

"There is a lot of demand for flash [memory] cards and a lot of that is because prices are coming down and capacities are going up," he says. "We're seeing a lot of demand across the board. Smart Media, which was one of the original formats, has been selling well because it has a large installed base; Compact Flash has been selling well because digital cameras are becoming very popular; and the newer form factors, MultiMediaCard and Secure Digital have been selling very well."