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DataPlay to Offer Solution to Storage Woes
http://123jump.com/news_story.htm?id_news=6400230

New York, Jun 14, 2001 (123Jump via COMTEX) -- All tech start-ups boast that their technologies are set to revolutionize the field they work in. But when high-profile names such as Kodak, Intel Capital, Olympus Optical and Toshiba bet on a young firm's potential and its products receive three major awards at the
Consumer Electronics Show in Las Vegas, the start-up may be well worth watching.

Boulder, Colorado-based DataPlay Inc. offers a solution to storage woes and aims to become a standard for the distribution and recording of digital content in the consumer electronics marketplace.

DataPlay is on its way to launch a product that can be used for all forms of digital content, such as music, video, digital images, games and software, and is even more compact than the compact disc.

Tiny Size and Low Cost

The company's universal media solution is designed to permanently store a large amount of digital content. One 500-MB digital media disc can store a staggering 11 hours of digital MP3 music, or the equivalent of five standard CDs, several
albums worth of photos, or dozens of games.

Furthermore, DataPlay's disc, that competes directly with compact flash memory is about the size of a quarter-dollar and will cost you no more than $10.

The company plans to start selling the product in electronics stores in the upcoming fourth quarter. DataPlay discs will at first be used in music players and digital cameras.

The marketplace is already flooded with different storage technologies. They include Sony Corp's (SNE) MemoryStick ; DVD-Audio and SACD; Flash or SmartMedia cards; floppy disks or pint-size recordable CDs, and SD (Secure Digital) memory cards from Panasonic, Toshiba, and SanDisk Corp. (SNDK).

Roy, Utah-based Iomega Corp. (IOM) is another emerging rival of DataPlay . The firm recently released an upgrade to its PocketZip line of small storage disks for portable devices. Previously limited to only 40MB of memory, the newer matchbook-sized PocketZip disks can hold 100 MB.

DataPlay bets on the affordability and multiuse appeal of its products to capture the hearts of consumers as they are aimed at the mass market. But given the tough competition, it still remains to be seen whether they will be able to enter massive markets and become a standard.

Strong Partners

In order to penetrate the market, the firm has forged several strategic partnerships with leading content providers and consumer electronics manufacturers.

Toshiba, Samsung Electronics, Imation Corp. (IMN) and SonicBlue Inc. (SBLU) are already designing a variety of devices like audio and multimedia players and digital cameras that use DataPlay's micro-optical engines and discs. In additon, nearly 40 manufacturers have expressed an interest in building products that use DataPlay technology.

Besides electronics manufacturers, the firm is targeting the music industry as well. DataPlay's storage format will allow recording companies to pre-record their music on the discs. The technology enables music to be combined with videos, interviews, photos and additional content on the same disc.

Three of the Big Five music companies have signed agreements with DataPlay to release new albums on its high-capacity discs by the year-end. In March, BMG Entertainment followed Universal Music Group and EMI Group in adopting the new format.

In addition to content arrangements with music labels, Rosetta Books is planning to release e-book content on DataPlay digital media disc for use in multiple consumer electronic devices.

DataPlay enjoyed wide recognition at the January 2001 Consumer Electronics Show (CES) in Las Vegas, an event that is reputed to be the showcase of the industry's most promising companies and products . It received an innovation award, the best award in the mobile device category and the best of CES award out of more than 1,800 exhibitors at the show.

The company was also a winner at The Boulder County Business Report's 2000 IQ Awards event. This event recognizes the innovative abilities of the county's prominent entrepreneurs.

VC Money Flows

DataPlay was founded in November 1998 with Universal Music, Toshiba, Samsung Electronics, and Imation as investors. The company has seen an infusion of $119 million in financing since its inception.

After closing a $50 million round of venture funding in May 2000, DataPlay clinched another $55 million from investors in early June 2001. Kodak, Olympus Optical, Intel Capital, Imation Corp., and Trans World Entertainment (TWMC) took part in the round. Musician David Crosby was also one of the investors.

The company intends to use the money for the pending launch and marketing of its products. It also plans to expand its manufacturing capabilities. Currently about 175 employees work for DataPlay in the United States, Singapore and Japan, but staff is expected to exceed 250 by the end of the year.

DataPlay's executives said the latest round, coupled with expected revenues, will launch the firm on the road to profitability.


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