Sony, SanDisk ink Memory Stick pact

Sony Corp.'s Memory Stick got a boost on Wednesday when the company signed a deal with memory card maker and reseller SanDisk Corp. under which SanDisk will supply Sony with flash memory and Sony will supply finished Memory Stick cards back to SanDisk 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 spokesman Atsuo Omagari. He would not disclose details of the new cards although said 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-brand cards, Lexar Media Inc. began selling Memory Stick shortly after Sony made a US$2 million investment in the company in April 2000.

SanDisk gets a new customer for its flash memory chips and is also able to 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," said Mike Wong, a spokesman for SanDisk. "Memory Stick has been selling very well, I think Sony has sold over 7 million since their 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 Corp. and Matsushita Electric Industrial Co. Ltd., but the agreement, and SanDisk's work on a next-generation Memory Stick, won't affect those cards, said Wong. "This is an addition to our product line. It won't supersede any of our existing products."

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

"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 said. "We're seeing a lot of demand across the board. Smart Media, which was on 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."

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