Switching Costs: Can it Fit Inside a CompactFlash Slot?
Will the CompactFlash form factor win out or facilitate other competing technologies?
This is the fifth installation of my investment case for flash memory and digital photography. The content of my discussion will follow the table below. I am also including links back to prior chapters so as to facilitate participation by thread members who may have missed earlier portions of this presentation.
Table of Contents
Message 9880779
CHAPTER ONE
Tornado Watch: The Unrealized Potential of Flash Memory in Digital
Photography and Portable Consumer Electronics
Message 9878229
CHAPTER TWO
Discontinuous Innovation: The Fossilization of Kodak, Fuji and Agfa?
Message 9897772
CHAPTER THREE
Links in the Value Chain: The Essential Features of a Digital Darkroom
Message 9920884
CHAPTER FOUR
A Proprietary and Open Architecture: Distinguishing "Commodity" from
"Commoditization"
Message 9977057
CHAPTER FIVE
Switching Costs: Can it Fit Inside a CompactFlash Slot?
Will the CompactFlash form factor win out or facilitate other competing technologies?
I was recently advised to recall the following dynamic that ultimately governs the acceptance or rejection of a "commodity" storage solution such as removable memory...
"CARDS FOLLOW SLOTS."
It is as simple as that. It follows, therefore, that the key is to pack as much innovation into a given "solution" so that the dedicated slot which houses the "solution" becomes a defacto standard, not the card or device or drive itself. In this instance we are talking about removable non-volatile RAM as a "solution" and the CompactFlash slot as the defacto parking garage. With the formation of the CompactFlash Association this standard immediately became a focus for subsequent development and added functionality. It is the destiny of CompactFlash slot which will determine the fate of CompactFlash or any product designed to fit into a CompactFlash slot. Therefore the critical question posed to investors is:
"Will it fit in a CompactFlash slot?"
For the sake of simplicity I wish to focus the discussion for the time being on the digital camera market. As I mentioned previously, digital photography is perhaps the most demanding application for flash memory due to the sheer volume of data, the need for reliability and durability, and the importance of write speed. Kodak, as a visionary in the field, had already outlined the pre-requisites of a flash solution to the digital photography dilemma when it selected CompactFlash in its first consumer product (http://www.compactflash.org/pr/960912b.htm).
It would be important at this point to summarize the essential features of a viable "solution" to the demands imposed by the digital camera manufacturers several years ago. It is my contention that the selection process for this defacto standard was slow, deliberate and methodical. The selection process was not at all haphazard or motivated by "desperation" as Moore would have us believe. In fact, the defacto standard developed long before we crossed the chasm, and certainly before we have entered the tornado, a phenomenon which speaks to the velocity of this developing application and the changes in the market place which have occured even since Moore published his Gorilla works.
The essential features of a flash memory solution for the digital camera market are:
*cost
*durability
*reliability
*form factor
*write speed
*storage capacity
*power consumption
*backward compatibility
*plug 'n' play capability
*issues related to PC interface
and most importantly...
*cross platform compatibility
Because the original equipment manufacturers incorporating the technology into the final product assume the responsibility for any deficiencies with regard to the above pre-requisites, it would be in their best interest to chose early and wisely. In doing so, Kodak selected CompactFlash for the following reasons...
COST: Because of the nature of "removable" memory, the "unremovable" hardware which remains in the device contributes to OEM costs. CompactFlash offered a simple assembly which could be incorporated inexpensively at the OEM level. Kodak also assumed that by the principles of "Moore's Law" (Gordon Moore, that is) the cost resting upon the shoulders of the consumer would likely be bearable.
DURABILITY: Because flash memory is, by nature, non-volatile and rugged it is considered an ideal medium for the average consumer with two left hands. CompactFlash contains no moving parts. CompactFlash can sustain a fall of 10 feet onto a solid surface.
RELIABILITY: An attribute of CompactFlash is the ability to perform a sector scan so as to identify and eliminate bad cells from further read and write blocks. This is similar to the "ScanDisk" function offered by Microsoft for PC's running Windows or DOS. The reliability of CompactFlash is so great that a single card is, for all intents and purposes, inexhaustible.
FORM FACTOR: CompactFlash is small, sturdy and stealthy. It follows the original
type II PCMCIA height dimensions, but is considerably smaller.
WRITE SPEED: Current innovations allow for acceptable write speeds for consumer applications in the range of 500 KB to 1.4 MB per second. Write speed issues may become more relevant as higher resolution (affordable) digital cameras arrive at the consumer level.
STORAGE CAPACITY: CompactFlash presently possesses a capacity of at least 128 MB per card. This capacity is certain to rise substantially as smaller geometries are created (0.25 micron and below).
POWER CONSUMPTION: Low power consumption is a known attribute of solid-state, NVRAM.
BACKWARD COMPATIBILITY: Because a card controller is embedded into the card and not the digital camera itself, the issue of backward compatibility of successive generations of cards was guaranteed.
PLUG 'n' PLAY CAPABILITY: The ATA controller in the CompactFlash card allows for emulation of disk drives without the need for additional software or hardware driver installation. Plug 'n' Play capability is one cornerstone of CompactFlash's functionality.
THE PC INTERFACE: The CompactFlash card was developed as a version of the PCMCIA standards in a smaller form factor. It can be inserted in a type II PCMCIA slot with an inexpensive adapter.
CompactFlash as a Contender
Other "solutions" available to Kodak during the inception of their first digital camera offering were presumably handicapped by design and dropped from consideration. This includes Intel's "solution", the Miniature Card. To my knowledge, no current digital cameras have incorporated the Miniature Card in their design. One key factor in this decision may be related to the lack of an existing PC interface. The fate of the Miniature Card was sealed in this design flaw. In fact, Intel has come to the realization that the device is inferior to CompactFlash as evidenced in the following...
techweb.com
Another viable option was the Clik! drive by Iomega. The key deficiencies of this device included the need to incorporate a disk drive system into the camera (form factor, cost and power consumption violations) and the lack of an existing direct PC interface. Although marketed heavily of late, the Clik! has not been able to penetrate the digital photography market at the OEM level to any substantial degree. The portable Clik! devices which serve as a low cost adjunct or reservoir for other "solutions" (CompactFlash or SmartMedia) require the consumer to purchase another electronics device in addition to the digital camera and will likely peak little interest for those who wish to practice truly mobile and uninhibited digital photography.
What works?
To date, successful forays into the digital camera market have been accomplished by an improbable contender, the standard 1.44 MB floppy disk and the strongest competitor to date, SmartMedia by Toshiba.
The floppy disc, the prototype commodity widget, has produced the overwhelming success of the Sony Mavica. The PC interface and cost considerations are obvious. But this has come at some price. First, the Mavica is limited in resolution to VGA or XGA resolution and has not been able to break the megapixel barrier. This is due to the limitations of storage capacity. Second, the floppy requires a dedicated floppy drive (a clear violation of cost, form factor and power consumption principles) creating a chunky and somewhat cumbersome device. It is for these reasons that higher resolution models from Sony will incorporate flash memory.
SmartMedia has proven to be a formiddable opponent. The key differentiating features being the lack of the ATA controller on the card (lowers cost yet reduces functionality), backward compatibility issues, capacity issues (related in part to backward compatibility issues) and cross platform compatibility (see below). These deficiencies have been highlighted on several digital photography message boards and are summarized in the following links...
digitalkamera.de
digitalkamera.de
digitalkamera.de
and have also lead to the formation of a governing body lead, to my surprise, by the PCMCIA.
techweb.com
To date there has been a distinct migration from the SmartMedia "solution" to the CompactFlash "solution" related to these and other issues. In my opinion, Olympus and Fuji, the remaining digital camera heavyweights supporting the SmartMedia standard, have persisted due either to: 1) switching costs, or 2) allegiance to Toshiba. This situation may be analagous to that described by Moore as it related to the adoption of the Intel microprocessor defacto standard in the US by IBM and the NEC standard in Japan.
Another rising star is Sony's flash memory "solution", the Memory Stick. This is the flash memory card developed to sidestep the difficulties with floppy drive originally employed in the Mavica line. To date Sony appears to be creating a market for the Memory Stick at considerable cost. Memory Stick possess many of the attributes of CompactFlash. To the casual observer it remains unclear as to me why the CompactFlash standard was not accepted, as Sony's backing would clearly be a big boost to the CompactFlash Association and would avoid the costs related to the insular development and deployment of the Memory Stick. Some will say, "Because that is just what Sony does!!!" Others suggest that it is being done so that it can later be leveraged against the popularity of Sony's digital Walkman.
Non-Flash Memory Solutions
IBM's microdrive represents a significant departure from the original pre-requisites I described above. It is a solution employing a rotating disk. Thus, durability and power consumption come into question. Also, it will offer immense capacity, but at a significant cost to the consumer. Also, in order to garner IBM's backing of the CompactFlash standard, the CompactFlash Association created a second CompactFlash form factor called CompactFlash type II which addresses the issues of form factor (larger) and power consumption (greater) in its design. SanDisk's position regarding the microdrive (and other rotating media "solutions") is as follows...
The IBM Type II CompactFlash MicroDrive announcement represents a major endorsement of the CompactFlash™ (CF™) standard invented by SanDisk. As founding company and technical chairman of the CompactFlash Association (CFA), SanDisk worked with IBM and other major manufacturers to define the specifications for the Type II CompactFlash card. This new Type II form factor is 5mm thick while the current CF (Type I) is 3.3mm thick. IBM's endorsement of CF is also an acknowledgment of the potentially large future markets opening up for CompactFlash.
One rotating diskette solution is being provided by Sony's Mavica camera. The Sony Mavica uses a 3.5" floppy diskette to store images taken by the Mavica. This diskette holds only 1.44MB; therefore, in order to store numerous pictures, the Mavica must compress those images. This compression of images causes the high resolution mode of the camera to truly just offer an average resolution. With a limit of 1.44MB, the Mavica can only store a certain number of images and cannot be upgraded. The Mavica also requires changing batteries often as the spinning floppy disk consumes much power.
Iomega also recently offered a rotating media solution. In 1996, Iomega introduced the n•hand which Iomega never shipped. In 1997 just prior to COMDEX, Iomega renamed n•hand and released it as clik. With 40MB at $10, the clik is a great eye-catcher to many end users; however, reading further about the product reveals that the clik requires an internal clik drive. It takes considerable space to put this drive in a camera. That makes the camera larger. And the camera manufacturer has to build this drive into the camera...
Cross Platform Compatibility
Cross platform compatibility is an issue unrelated to the digital photography value chain. I propose that the acceptance of the CompactFlash slot by other mobile electronics platforms helps to secure its position and add to switching costs. As CompactFlash becomes deeply engrained in multiple markets it will be increasingly difficult to extract. These devices add a dimension of universality to the CompactFlash slot. To be specific, such complimentary markets include:
*digital videocameras
*mp3 and related mobile audio devices
*PDA's and other microcomputers (vertical markets)
*digital voice recorders (speech recognition applications)
A in depth review of each of these individual tornados is beyond the scope of this discussion. They offer the consumer a value added feature of CompactFlash because of the plug 'n' play characteristics defined above.
Other Value Chain Participants
Other value chain participants will help secure the position of the CompactFlash slot much like Gulliver and his captors, the Lilliputians. These are so-called CF+ devices because they use the CompactFlash slot, but are not flash memory devices themselves. They are another value added feature of CompactFlash. Again, a detailed discussion of this market is beyond the scope of my presentation. Such devices may include...
phone modems
socketcom.com
pager modules
mot.com
GPS units
pccard.se
LAN cards
pretec.com
barcode scanners
socketcom.com
The Unique Attributes of CompactFlash: Will they suffice?
Will the unique attributes and universality of CompactFlash and the value added functionalities the CompactFlash slot be enoough to create a insurmountable cost of switching? This remains to be seen. To those who wish to supplant CompactFlash with their own "solution" I ask...
Will it fit in a CompactFlash slot? |
