Flash memory developer M-Systems Flash Disk Pioneers (Nasdaq: FLSH) today announced that its Mobile DiskOnChip has been adopted in Sony's PEG-UX50 CLIE handheld device. The company said that the 512-megabit (64 megabyte) Mobile DiskOnChip has the storage capacity needed to realize functions such as PDA/scheduler, address book, task management, memo pad, music player, digital image capture, and movie playback.
"M-Systems' Mobile DiskOnChip, with its compact-sized package, competitive cost structure and high speed write performance, contributes to our CLIE PEG-UX50 handheld for features and performance that customers request," said Hideki Tanabe, chief engineer of Sony Corporation's handheld computer company.
The agreement with Sony (NYSE:SNE) gives M-Systems another important foothold in the Japanese electronics market, consolidating its position. The Japanese market is considered the early adopter of consumer electronic products. Furthermore, an agreement of this kind with Sony, one of the largest and most important Japanese electronics companies, and the pennant holder in its field, should open many doors in Japan for M-Systems.
"From the beginning, we designed the Mobile DiskOnChip (MDOC)for the mobile devices market, in other words for palm-top computers and cellular telephones," says M-Systems president and CEO Dov Moran. "The fact that we're now putting MDOC into Sony's CLIE hand-held device, the industry's flagship product, will make it the industry's accepted data storage solution.
"Sony's CLIE is a miniature computer designed for the high-end market. In the future, the hand-held computers for the high-end market will turn into computers for the mid-level market, in other words, they'll become more common. This industry is now adding new features for hand-held computers, and other manufacturers are therefore interested in upgrading their products with MDOC. The industry has created a need for a solution like MDOC."
"Globes": What are the advantages of the current M-Systems-Sony contract?
Oscar Gruss analyst Tzachi Rodnik: "M-Systems's contract with Sony has two main advantages. First is its potential for opening a new market for the company. Until now, M-System's MDOC had been designed for 3G cellular telephones. Under the new contract, for the first time, MDOC will be installed in a kind of miniature computer whose size is similar to that of a palm-top computer, and which combines the capabilities of a palm-top computer, audio-video player, the ability to download and play short clips, etc.
"Another advantage of the contract lies in the fact that Sony is known as a company that prefers developing most of its own solutions. Its choice of M-Systems testifies to the technological advantages of the product."
What is the potential of the contract for M-Systems?
"It's hard to put a number on it at this stage, but I can say that since Sony's product is expected to be marketed throughout the world, it can open many markets for M-Systems, both in other countries and among other leading electronics manufacturers. At the same time, the current contract can open the door for M-Systems for additional contracts with other Sony departments, particularly its 3G cellular telephone division, which collaborates with Sweden's cellular equipment giant Ericsson (Nasdaq:ERICY; SX:ERIC)."
In late July, M-Systems announced an important collaboration with Toshiba (TSE:6502; LSE:TOS; XETRA; AEX; Paris:TSBA). The two companies will cooperate in product development, licensing, manufacturing, marketing, and sales. Toshiba will also make a $4 million strategic investment in M-Systems in exchange for a share allocation based on its market cap.
Published by Globes [online] - www.globes.co.il - on 20 August 2003