In the Storage Race, Will Consumers Win?
By MICHEL MARRIOTT April 5, 2001
Cradled in a hand, the shiny disc, encased in a sliver of clear plastic roughly the size of a half-dollar, suggests an artifact left behind by some flying saucer.
But the disc is the chief product of a two-year-old company called DataPlay, based in Boulder, Colo. The optical discs, known as DataPlay digital media, can store up to 500 megabytes of data, almost as much as a standard compact disc. The company plans to start selling them later this year for about $10 apiece. It hopes that the discs will become more commonplace than CD's, finding their way into an ever-expanding world of digital music players, digital cameras and camcorders, personal organizers, e- book readers and the like.
There is just one problem. A DataPlay disc can be read only by a device that has a special DataPlay reader. And a DataPlay reader cannot read any other kind of media.
With the introduction of DataPlay discs, yet another innovation in digital storage that its makers say will make practically everything that came before it obsolete, the types of storage consumers may turn to for digital music, pictures, video, games and data grows ever more crowded and confusing.
Consumers already face a maddening array of removable storage products. They come in different shapes, sizes and capacities, like Compact Flash; SmartMedia; Sony Memory Stick and MiniDisc; Iomega's Zip, Jaz and Pocket Zip; CD-ROM; CD-R; CD-RW; DVD-RAM; DVD-R; DVD- RW; the I.B.M. Microdrive; the Imation SuperDisk; and a range of tape-based systems with very high capacity.
Some of these products spin; others are solid state. Some use magnetic technology; others are optical. They have a wide range of prices, although, as with computer products in general, prices are falling. And like the DataPlay disc, they are largely incompatible with one another.
While some of these products are more popular than others, many experts say that there is no clear winner yet in this crowded field of removable storage formats. But the marketplace will not long tolerate such a wide offering digital storage products.
There has to be a shakeout, analysts say. That could mean that the $1,000 digital camera that saves its high- resolution pictures on one type of storage medium today may be useless tomorrow if the storage medium becomes outmoded and is replaced by something the camera was never designed to use. Remember Sony's Betamax videotapes and players?
"Clearly, one, maybe two formats will have to remain, but right now it's hard to say which is going to be the right format," said Bruce Kasrel, a senior analyst for media and entertainment at Forrester Research, a group in Cambridge, Mass., that analyzes the future of technologies. "Eventually one will bubble up that will have the price and performance and licensing strategy that can get them in all kinds of devices."
In terms of universality, there is not yet a clear successor to the 3 1/2-inch diskette, the creaky but dependable mainstay of storage media designed for personal computers. For well over a decade, practically every laptop and personal computer has come equipped with a slot that accepted the low-cost diskette, making it easy to exchange information between computers, although slowly and, at only 1.44 megabytes per disk, rather tediously.
Douglas R. Kraul, the chief technology officer for SmartDisk, a company that makes adaptive devices that help consumers use lots of different kinds of storage media, said that a dominant storage technology usually arose because there were one or two high-volume applications. In the case of the 3 1/2-inch diskette, the decision by computer makers to include 3 1/2-inch drives in their machines in the late 1980's was crucial. When home and office computer sales soared in the 1990's, 3 1/2-inch diskettes became almost as common as wire clothes hangers.
But executives at Sony Electronics are not waiting for such high-volume applications to arise. Rather, they are spreading their removable storage product, called Memory Stick, across many applications.
In the nearly two years since Memory Stick was created, Sony has made the product essential to linking a broad family of its devices together, from its VAIO desktop and laptop computers, to its Clié hand-held organizers, camcorders, portable music players and in-dash car navigation systems. Even its newest Aibo robot dog uses Memory Stick.
Sony officials say that Sony has 48 types of products on the market that use Memory Stick and has sold nine million products that have Memory Stick slots in them.
Yet outside the Sony world, Memory Sticks are anything but ubiquitous. Even though Sony said it would encourage other companies to build devices using the technology, few such products have been released.
Memory Stick is only one format for solid-state flash memory; others include SDMI Secure Digital Cards, MultiMediaCards and SmartMedia Cards. Flash memory is used in the widest variety of portable digital devices, including cameras, audio players, cellular telephones and hand- held computers.
Dr. Eli Harari, president and chief executive of SanDisk Corporation, a major maker of flash memory cards in Sunnyvale, Calif., said that as portable digital devices continued to be developed and to proliferate, the future for portable data storage media companies like his could not be anything but bright.
"The desktop personal computer market is very mature," Dr. Harari said, while the market for portable digital devices is still growing.
The benefit to consumers, he said, is that as makers of storage media strive to meet an explosive demand, prices will fall. That is especially significant, he said, for flash memory, which has cost more per megabyte than spinning optical discs, like the much larger, and more familiar, five-inch recordable CD's and DVD's.
A re-writable DVD-RAM, for instance, can easily hold 5,200 megabytes of digital information for little more than $30, while a CompactFlash card with about a tenth the capacity costs about $1,000.
With the economies of scale and improved manufacturing techniques, flash memory is destined to drop steadily in price, Dr. Harari said. Like the microprocessors at the heart of personal computers, flash memory is also subject to Moore's law, experts say. That means that flash memory's capacity should double about every 18 months.
Examples of that are already beginning to be seen, Dr. Harari said. A 64-megabyte CompactFlash card that sold for $149 a year ago is showing up in some stores for about $100. Dr. Harari said he was sure that in the next several years, similar memory cards would cost no more than $20.
Such cost reductions in storage media will spur an explosive growth in devices like portable audio players, he said. Today's music players commonly cost $200 to $300, and half to a third of that cost is attributed to the price of the flash memory.
Some experts contend that flash memory and other related chip- based media have much in their favor. One of their chief advantages is that they do not require, as DataPlay discs do, a relatively costly player that must be installed in a device so the disc can be read.
Because flash memory does not require moving parts to be read, some experts say they believe that flash will win the race for a universal storage medium.
But even with flash memory, the types and formats still confuse many consumers, some managers of consumer electronics stores said in recent interviews. Sandisk alone makes PCMCIA FlashDisks, CompactFlash Disks, MultiMedia Cards, Secure Digital cards and more.
"All the flash stuff is all the same stuff, just repackaged," said Steve Volk, the founder and chief executive of DataPlay, who recently announced that he had struck deals with major record companies to also sell recorded music on the DataPlay disc. "None of the flash stuff is suitable for pre-recorded content."
But critics of optical data storage media like DataPlay's and all recordable CD's and DVD's say that because such media must spin at high speeds, they are more prone to skipping and other mechanical problems. They also consume more power, which reduces battery life.
Optical-based storage is also, some critics say, much more costly for device makers because they must build in the mechanical means to play and read the discs. (The same is true, Dr. Harari said, for any mechanical shortage device, like the I.B.M. Microdrive, which is a tiny hard drive.)
Before a DataPlay disc can work, a device must be built with a DataPlay micro-optical engine, which is about the size of a matchbox. Such an engine, said Mr. Kasrel, of Forrester Research, adds to the cost, size and complexity of the device. Solid-state memory cards have no moving parts, and none are required to read them.
In the end, Mr. Kasrel said, increasing capacity is not going to mean very much to many consumers if the price of storage does not fall drastically as well.
For most consumers, he said, simply getting more digital storage is much like going from a few television channels to hundreds but still not being able to find anything interesting to watch.
What the makers of removable storage devices really need to be able to do, he said, "is to have something very small, with lots of memory, that is so cheap that you could almost throw it away."
That, even the most ardent believers in Moore's law agree, may take awhile.
Copyright 2001 The New York Times Company
