By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Consumers may not know their SD from their xD, but they're buying up the cards at a record rate regardless, say flash-memory vendors. They are also confronting a vaster array of choices within their format of choice, with value cards sold through drugstores to high-performance, high-capacity cards for the discerning.
“We saw tremendous unit growth in 2004,” said Jim Gustke, general manager, marketing, Lexar. The downside, Gustke said, is an associated price decline that slowed dollar volume growth.
“Retailers have to sell more to make the same dollar amount as last year,” Gustke said.
Thanks to falling prices and an influx of new supply and retail competition, established vendors have focused heavily on differentiation. “We have a good, better, best strategy distinguishing the cards by performance,” said Wes Brewer, VP, consumer products, SanDisk.
Lexar, which speed rates its memory cards, is also promoting a technology called “Active Memory” for its higher-end CompactFlash cards, which essentially builds a level of intelligence into the card's controller to automate certain photography functions. The company is currently working with camera vendors to build hardware support for the technology, Gustke said.
The symbiotic relationship between card and hardware performance has yielded tangible gains for the consumer, said Michael Khan, senior marketing manager, Sony. “Our MPEG-VX fine mode in the new Cyber-shot M1 would not be possible without the new high speed Memory Stick PRO.” This mode allows the camera to record a five-second video clip before and after a high-res still image.
With speed defining the high-end, vendors have leveraged the price declines to break into new mass retail channels. Both SanDisk and Lexar are attempting to make flash memory cards a mass market commodity like the silver halide film it is inexorably replacing. Aside from prying open new retail channels, flash vendors eye a more ambitious gambit: create a “use once” model for a rewriteable technology.
“I think consumers will use it once, because there is a very real need to archive your digital photos for the long term and flash is a great way to do that,” Brewer said.
“Time will tell how people will ultimately use these cards,” Gustke said, “but a price point under $10 opens up a lot of new opportunities.”
SanDisk's mass market line, Shoot 'n Store, is currently in 20,000 store fronts and is having the best success in drugstores, Brewer said. Pick-up has been slower in supermarkets, he added.
Lexar teamed with Kodak to offer Kodak-branded flash memory in mass retail outlets that traditionally carried Kodak film.
As for the multiplicity of unique form factors, the market has crowned a winner, Brewer said. “SD is the clear choice of manufacturers in their new designs, and this year we saw the market crossover from CompactFlash to SD.”
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.