DataPlay to debut tiny media next quarter

DataPlay Inc., which has developed a new type of storage for digital media players and recorders, is planning to see both its postage-stamp-sized discs and gadgets that use them on store shelves in the first quarter of 2002, company executives said this week.

In January, DataPlay said it planned to have products available in the second half of this year. However, development took longer than expected, Steve Volk [CQ], DataPlay chairman and chief executive officer said in an interview here at the Comdex trade show. "It just took a long time," Volk said. "We had to develop the drive, the media and the manufacturing process."

DataPlay's tiny discs will be available for sale -- either blank or pre-recorded -- for use with digital cameras, portable music players and PDAs (personal digital assistants), Volk said. "This is a universal media for all things digital," he said.

The company seems to have enough force behind it to win users for the media, with Universal Media Group Inc. -- an early investor -- EMI Group PLC and BMG Entertainment Inc. all announcing plans to sell pre-recorded music on the discs. Users would buy an album on a DataPlay disc, for about the price of a CD, and then be able to unlock additional albums already stored on the 500M-byte discs, for under US$10, Volk said. Blank media will cost from $5 to $10, he said.

Players and media are set to launch next quarter, and while Volk would not disclose who the first hardware manufacturers would be, the price of the players will be in the $299 to $329 range, Volk said.

"The discs can also store music videos, Web links, and an up-to-date list of concert dates," Volk said. Users wanting to unlock the additional content can do it through an online retailer by connecting the player to a PC through a USB (Universal Serial Bus) port, Volk said.

One analyst said that while the company's product holds potential, it won't register until it actually appears on shelves. "Right now, we're very much in wait-and-see mode," said P.J. McNealy [CQ], senior analyst at Gartner Inc. "Some of their channel partners are in the same position."

Another analyst said that for DataPlay to be widely adopted, it needs to partner with one of Japan's large consumer electronics companies, mainly Panasonic Corp. or Sony Corp. "I think they need one, if not both of those guys," said Danielle Levitas [CQ], a program manager in San Mateo, California, for research company International Data Corp. (IDC). "Even then, it's going to take years for penetration to become significant."

The devices also double as portable storage devices when connected to a PC through USB, Volk said. Although the discs can fit 500M bytes of data, they can only be written to once, so when the disc is full, it can only be read, similar to a CD-R disc.

DataPlay is working with other business models as well. One possibility might be putting all of Stephen King's [CQ] novels onto a single disc, and letting the buyer have access to the first chapter of every book free, Volk said. Electronic bookseller Rosetta Books LLC has already announced plans to offer books on DataPlay's discs.

At the Consumer Electronics Show (CES) here earlier this year, DataPlay also showed prototype devices, including a camera from Toshiba Corp. and an MP3 player from SonicBlue Inc.

But the different uses of the media remains a moot point until it becomes available, Gartner's McNealy said. "Clearly their potential to distribute protected media is high, especially with the amount of data they can fit on the discs," he said. "But first they have to produce the discs, then they have to have the right content partners lined up, then distribution partners -- until they get all that together, it's difficult to say how they'll do."

Other companies that have invested in DataPlay include Eastman Kodak Co., Intel Corp., Olympus Optical Co. Ltd., Imation Corp., and musician David Crosby.

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Douglas F. Gray

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