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Devices for DataPlay’s mini disks expected to reach market by fall

By Anjanette Mudd
Staff Writer
BOULDER – The compact disk is no longer the most compact. The first devices designed for Dataplay Inc.’s multipurpose mini disk will be available this fall. Manufacturers haven’t announced products yet, but stand-alone music players, digital cameras and USB adapters are the first in what Chief Executive Officer Steven Volk hopes will be a long line of devices capable of supporting the disks.

Volk said several early production units for some of the products are available, but none are ready for distribution.

Pending products include a portable audio player/recorder being developed by Samsung Yepp, and a mobile audio player being developed by Toshiba Corp. Volk said a few personal digital assistants (PDAs) capable of supporting the disks also are being worked on, but they may not make it out this year.

The stand-alone music players will range in price from $199 to $299; the digital cameras from $599 to $2000; and the adapters will cost no more than $199. The adapter device plugs into the USB port on the user’s computer, much like early CD-ROM devices did before computer manufacturers integrated them into computers. All the devices will be available to consumers through computer and electronics retailers sometime this fall.

Dataplay is working on its own disk drive. In February, the company poured $30 million into its manufacturing facility in Singapore to develop the drives, called micro optical storage engines or optical pick-up units. This is the read-and-write component found in all optical disk drives, including those for compact and digital video disks.

"Dataplay is establishing a new standard," Volk said. The release of these devices is the first step toward his goal of creating a universal standard for media players, ranging from computers, to stereos, to MP3s, to cellular phones, to PDAs, to e-book readers, to whatever else evolves.

Dataplay was launched in Boulder in 1998 as a provider of digital media for portable Internet and electronic devices. A number of investors, including Boulder’s Sequel Venture Partners, Toshiba, Samsung and Universal Music have had a strong role in the company’s success. Boulder venture capital firm iBelay also is an investor.

Since May 1999, Dataplay has received financing totaling $64 million. The company also was a winner at The Boulder County Business Report’s 2000 IQ Awards event, which recognizes the innovation of the county’s top entrepreneurs.

Michael Goodman, a senior analyst at The Yankee Group Research Inc. in Boston, said the release of the devices this fall is a good first step for Dataplay. "They’re moving in the right direction" he said. But the release of devices that accept the disk is only one part of the process. In order to be successful, Goodman said there must be content in stores that’s available for the disks.

Dataplay plans to release disks with prerecorded music, e-books and games. It is targeting the music industry, having developed successful distribution relationships with several top labels, including Universal Music Group, EMI Group and BMG Entertainment. With these three companies distributing albums on the disk, Volk said Dataplay has created enough critical mass in the industry.

"DataPlay has aligned itself with many well-known partners, so the consumer will be familiar with the names of our products. And once we are on the shelves, we will begin a nationwide advertising campaign to educate and entice the consumer about our media and our partners’ products," said Diane Taylor, marketing assistant and Dataplay spokeswoman.

But it won’t be easy. "It (the disk) clearly has a lot of different applications," Goodman said, but it will be competing against the established CD and DVD markets.

Not so, said Taylor. "Our goal is to bring out a totally new format that will be complimentary to established media. The consumer will now have another choice for their entertainment needs, as well as their data storage needs." Size may give Dataplay’s disk an edge in consumer markets. The disks are comparable to a quarter, making them a viable option for use in handheld and mobile devices as well as music players and computers. And because the disks are capable of archiving data, downloading will not be necessary, Taylor added.

Cost is another factor. Volk said blank disks will sell for between $5 and $10 each. With content, the cost will be comparable to that of corresponding video, software and audio products on the market today. They will be available at computer specialty and consumer electronics stores.

The disks also are prerecordable and recordable, so they can contain content and record it. The disk can store up to 500 megabytes of data, which amounts to about 11 hours of music, hundreds of photos, or dozens of games and e-books. In the future, Volk said it will have the capacity to store several gigabytes of data.

Taylor said it’s hard to know how long it will take for the disk to catch on with consumers. "Today’s consumer has seen many high-tech innovations come and go in recent years, so it will be up to them to embrace the new format. Considering the affordability and the multiuse appeal, we think consumers will be willing to give DataPlay a chance." Goodman said adoption of the Dataplay disk in the mainstream is a process that will take years. He compares it to direct broadcast satellite technology behind Direct TV. DBS debuted in 1994. In its first year, Goodman said 1.75 million units were sold. Today, that number is hovering around 15 million. But it has taken seven years to get there. "They have their work cut out for them," Goodman said.

Contact Anjanette Mudd at [phone] or e-mail [e-mail].



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