Tuesday January 19, 10:34 am Eastern Time
Company Press Release
New, Internet-Linked MP3 Portable Music Players
are Large Potential Market for Sandisk Flash
Memory Cards
Pontis Ships World's First MP3 Music Player Using Flash and ROM MultiMediaCards
Manufactured by Sandisk and Siemens
SUNNYVALE, Calif.--(BUSINESS WIRE)--Jan. 19, 1999-- SanDisk Corporation (Nasdaq:SNDK - news) said today
that sales of new Internet-linked MP3 portable music players likely will create a major market for flash memory cards sold by
SanDisk and other card manufacturers.
With the recent introduction of the first MP3 players, the market already has started with music being downloaded from the
Internet to flash cards that serve as miniature recordable Compact Discs.
Leon Malmed, senior vice president of sales and marketing at SanDisk, said, ''The new Pontis music player signals the
emergence of a major new market trend: the digital distribution of music via the Web and the use of solid-state flash electronics
to replace mechanical, spinning parts. Today, flash cards already are replacing audio cassette tape and CDs.''
He stressed that ''there are strong market indicators, including forecasts from leading market research firms, that over the next
few years portable digital music players will become a mega application for removable flash memory cards. As the worldwide
market share leader in flash memory cards, SanDisk is working to capitalize on this market opportunity as numerous new
portable music players are introduced in 1999.''
SanDisk is working closely with a number of companies who will be introducing the solid-state, portable music players this
year. Pontis Electronic Gmbh, a German firm, recently started shipping its Mplayer3. It is the world's first portable music
player to play MP3 formatted music stored on flash or ROM MultiMediaCards manufactured by SanDisk and Siemens
respectively.
MP3 is a compression technology that allows about one minute of near CD-quality music to be stored in one megabyte (MB)
of memory. Within the next six months, it will be possible to record 60 minutes of near CD-quality compressed music on the
two MultiMediaCards available with the Pontis player.
Malmed observed, ''I have been in the storage industry for 30 years and this portable digital music player application promises
to sell as much flash storage capacity as any product application I've seen. We believe that much of this music will be stored on
small-size CompactFlash cards, which Sandisk invented, and on MultiMediaCards, which Siemens and SanDisk co-invented.''
He explained that just as it did for digital cameras, SanDisk is positioned to play a leading role in the music player market
because of its demonstrated ability to ship in high volumes and to drive for broad adoption of de facto standards for small form
factor flash cards.
Flash card unit sales have increased significantly in the past year, fueled in part by increased storage capacities and significantly
lower pricing. SanDisk recently introduced high-capacity 96MB CompactFlash cards and 16MB MultiMediaCards, two
products that are planned to start shipping this quarter.
''A 20MB CompactFlash card that sold at retail for $200 a year ago,'' said Malmed, ''will be priced at under $50 a year from
now.''
The MP3 music players also are being priced for mass market sales. The new Pontis unit sells for $159.
Semico, a leading market research firm, recently produced what it described as an ''aggressive'' forecast for solid-state music
players. Semico concluded that about 1.3 million units would be sold worldwide next year, 7.8 million units in 2001 and more
than 14 million players would be sold in 2002.
''SanDisk is on top of the rapidly growing removable flash card industry in both units and revenue,'' said Christopher Dawe,
semiconductor research analyst for IDC.
''CompactFlash is firmly entrenched as the leading card solution for digital cameras, while the MultiMediaCard standard has
the support of leading telecommunications companies as a storage device for that market. By achieving 16MB in the
MultiMediaCard form factor, SanDisk is well positioned to remain on top of the removable flash card market, for which
portable music players will be a driving application.''
The Pontis MPlayer3, which weighs less than two ounces, can easily fit in a shirt pocket. By using non-volatile, solid-state
memory, the MPlayer3 will never skip like a Compact Disc player and the sound quality will never suffer due to deterioration
of the storage medium such as occurs with traditional audio tapes when over played or re-recorded.
Besides downloading music from the Internet, the Mplayer3 software makes it possible to transfer music tracks from a user's
audio CD to the MultiMediaCards. The MPlayer3, which uses two AA batteries, is compatible with PC-based systems today
and will have Apple Macintosh support starting in February, 1999.
Andreas Keul, sales director for Pontis, said, ''The MPlayer3 includes two active MultiMediaCard slots. With a high capacity
16 MB MultiMediaCard in each slot, one can play approximately 35 minutes of near CD-quality music in the unit. Each slot is
designed to use MultiMediaCards up to 128MB when they become available which will enable the MPlayer3 to play over four
hours of high quality music.''
Downloading music from the Internet is expected to accelerate now that there is a broad industry consensus that copy
protection issues need to be addressed and resolved. In December, the Recording Industry Association of America and five of
the world's largest recording companies proposed a plan called the Secure Digital Music Initiative (SDMI) that would create
an umbrella standard for secure digital music sent over the Internet.
SanDisk Corporation, the world's largest supplier of flash data storage products, designs, manufactures and markets
industry-standard, solid-state data, digital imaging and audio storage products using its patented, high density flash memory and
controller technology. SanDisk is based in Sunnyvale.
The matters discussed in this news release contain forward looking statements that are subject to certain risks and uncertainties
as described under the caption ''Risk Factors'' in the company's annual report on Form 10-K and quarterly reports on Form
10-Q, filed with the Securities and Exchange Commission. The company assumes no obligation to update the information in
this release.
Note to Editors: All trade names are either registered trademarks or trademarks of their respective holders.
SanDisk's web site/home page address: sandisk.com Pontis' web site/home page address: pontis.de
MPlayer3 web sit/home page address: mplayer3.com
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