Memory Capacity in a Flash

jon.healey@latimes.com

Portable digital devices are like purses: They become more attractive, but less useful, as they shrink.

Unlike leather, however, the microchips and software in digital gear can be retooled over time to increase their storage capacity dramatically. And consumers are starting to see major gains on both fronts, as flash memory prices have dropped sharply and better compression software has been released.

Flash is a kind of computer chip that's used to store digital pictures, music, games, address books and other data. It's in just about any device that can be programmed or customized by users, from coffee makers to cell phones to advanced set-top boxes.

The price of flash remained stubbornly high last year in the face of heavy demand, particularly by phone manufacturers. Consumers buying gear with lots of built-in flash, such as a 64-megabyte Compaq iPAQ, typically paid $250 to $300. And those who bought products that came with too little memory, such as a high-resolution digital camera, had to shell out close to $3 a megabyte for a plug-in memory card.

Now, however, consumers can buy 128-MB memory cards for less than $100, and manufacturers are offering discounts, rebates and free memory bundles on portable electronics. "Certainly, it's come down at least 30% or 40%," said sales executive Rick Dyer of SanDisk Corp., a leading manufacturer of flash memory.

Analyst Richard Doherty of the Envisoneering Group, a technology research and consulting company, said the price drop was as sudden as it was large. He paid $140 for a 64-MB memory card around Christmas but recently found a card with twice as much memory for $95. Ouch.

"I'm not alone, so I don't feel bad," Doherty said.

Dyer noted that memory chips, like other chips, grow cheaper over time as manufacturers develop ways to pack more storage capacity onto less space. Late last year, however, a second factor came into play: oversupply.

Sales of flash-powered devices didn't live up to expectations for the 2000 holiday season, at least in part because of the economic slowdown. That left manufacturers and retailers with inventory to unload.

Doherty said several manufacturers have simply upped the amount of memory in their gear to avoid slashing prices. He predicted that this trend would continue through the summer, with 64-MB players commonly available for less than $130 by fall.

One exception is Sony, whose products use the company's Memory Stick flash format. Already priced well above the rest of the flash market, Memory Stick prices have dropped only 8% to 15%.

Mark Viken, a senior vice president at Sony Electronics U.S., said Sony's strategy as a brand is to charge more than its rivals. But he predicted that more price cuts would come, adding, "Sony will remain competitive."

Sony has a long way to go to match other forms of flash, given that its 128-MB memory stick sells for almost $240. Unfortunately for consumers with Sony devices, however, a Memory Stick device can't use any type of flash other than Memory Stick.

Meanwhile, two of the most popular formats for storing music on a portable player--MP3 and Microsoft's Windows Media--have effectively doubled the amount of music that can be stored on a memory card with no further loss in sound quality.

Thomson Multimedia, which licenses the technology behind the MP3 format, plans to release today a free trial version of its first significant upgrade, dubbed MP3 Pro. The new software restores some of the high-frequency sound and stereo separation lost through aggressive compression, enabling users to store about two hours of high-quality music in 64 MB of memory.

Ultimately, Thomson expects that MP3 Pro will be included in the same digital jukebox programs that consumers use to make MP3 files from CDs today. The trial version, available at http://www.rca.com, won't be able to copy songs off CDs, but it will convert uncompressed song files already on a computer into MP3 Pro files.

Naturally, the company hopes to charge software makers more for MP3 Pro than it did for plain old MP3, collecting up to $7.50 per jukebox program. Thomson is still negotiating the price with makers of the leading digital jukeboxes, and it remains to be seen whether those companies will incorporate MP3 Pro into their free releases for consumers.

Microsoft's latest version of the Windows Media Player doesn't let users rip CDs in any format but Windows Media, so it's not a likely candidate for MP3 Pro. But the company's steady improvements to the Windows Media format have produced a similar increase in efficiency, enabling users to cram two hours of high-quality music in 64 MB of memory.

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Times staff writer Jon Healey covers the convergence of entertainment and technology.

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