SanDisk vs. Samsung Flash
Samsung plays catch-up in flash
By B.H. Seo
EE Times
(04/01/99, 3:08 p.m. EDT)
SEOUL, South Korea — Hoping to extend its dominance of the memory market to flash, Samsung Electronics Co. Ltd., has made little progress so far supplying that technology to the hot market for MP3 audio players.
Instead, Samsung has encountered stiff competition from flash-memory-card maker SanDisk Corp. (Sunnyvale, Calif.). So far, developers of MP3 players or secondary models, including LG Electronics, Saehan, Digital Way and Koryo Media, have adopted SanDisk's 32-Mbyte card for their designs. "Our strategy is to go where the market is," said Nelson Chan, SanDisk's vice president of marketing. Korea "is a hotbed for MP3 player design."
LG's selection of the SanDisk card, announced last week, was also a blow to Samsung's strategy of making the MP3 player market a stepping stone to capturing a greater share of Korea's flash-memory business. Samsung had projected flash memory sales of more than $50 million this year. With domestic companies increasingly going with SanDisk's removable card, observers here said, Samsung's sales target will be hard to reach.
One reason for the rush to SanDisk's card is that it promises to reduce the price of MP3 players compared with players that use existing flash-memory products. Another advantage is flexibility: The SanDisk card can be used in other products like digital cameras. Industry sources said Samsung's failure to include forward and backward compatibility to digital cameras hurt its standing in the domestic flash market.
SanDisk plans to introduce a 64-Mbyte card in the second half of the year, Chan said.
Samsung supplied most MP3 player developers in Korea with flash memory last year, but as SanDisk stepped up its marketing here recently, Samsung found itself playing catch-up.
An executive of one developer of MP3 players complained about Samsung's pricing for flash memory, adding that many developers have concluded that the best way to reduce the price of their players is to switch from standard flash-memory products to the removable card.
Moreover, developers complained that Samsung's flash-memory-card entry comes only in 16-Mbyte versions, not the standard 32-Mbyte capacity.
With its market share slipping, Samsung officials said they plan to confront SanDisk's growing dominance of the flash-memory-card market by introducing a removable 32-Mbyte card during the first half of the year.
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