But less than ringing endorsements by key systems makers raised questions about the Memory Stick's popularity in equipment made outside Sony, which hopes to turn the Memory Stick into a de facto media card standard.

Sony executives said Memory Card's rivalry with other solid-state card formats was largely a media creation. Since its introduction in December 1998, the chewing gum-sized Memory Stick has eaten up 24 percent of the flash card market in both Japan and the United States, largely at the expense of the Smart Media format backed by Toshiba Corp. and Sandisk Corp., said Yutaka Nagagawa, corporate senior vice president of Sony's Memory Stick Business Center. Citing figures from GfK Group, a German research firm, Nagagawa said Smart Media's market share in Japan plunged from 80 percent in March 1999 to less than 50 percent in March 2001. And Smart Media's successor technology, called SD, has only captured about 2 percent of the market's sales, Nagagawa said. In contrast, cumulative Memory Stick shipments will reach 125 million by March 2003, he said.

But Sony has shipped only 10 million Memory Sticks to date, Nagagawa said. To lift the device out of its digital still camera niche, Sony plans an evolutionary strategy that includes adding network connectivity and then I/O expansion models.

Hardware improvements are already under way. Shipments of the Duo Memory Stick, targeted for mobile devices, will begin soon, said Masaharu Yanaga, senior general manager of Sony's Memory Stick Division. Before then, Sony plans to release a 32-Mbyte mask ROM version of the Memory Stick, which is to begin pilot production next month.

The ROM Memory Stick will kick off a "very rapid expansion" in density, including a 256-Mbyte version in 2002, which will be followed in 2003 by 1-Gbyte and 2-Gbyte versions capable of storing movies, Yanaga said. "We already have 4 Gbytes on the horizon," he said.

Technological millstones

Meanwhile, Sony has promised to address two of the Memory Stick's technological millstones in light of the growing market for broadband applications — higher data transfer rates, and lower costs per bit. Yanaga called data-transfer speed Sony's next strategic target, and promised a leap in read-write capabilities for next year's products.

Music industry executives have complained that the Memory Stick's present 2.5-Mbyte/second data-transfer rate could present a bottleneck to listeners downloading music onto mobile phones. Sony will push the transfer rate to 10 Mbytes/s, easily beating the 8-Mbyte/s rate of the next-fastest format, Compact Flash, backed by Hitachi Ltd. and Sandisk.

Rivals are not standing idly by. The team of Toshiba, SanDisk and Panasonic is due to roll out a 10-Mbyte/s SD card that will cost under well under 200 yen ($1.65) per Mbyte in late 2002, sources said.

On the density front, Toshiba Corp. said it will have 1-Gbyte SD cards available as early as late 2002, according to Tomoji Takada, senior manager of the custom LSI technical marketing and engineering department at Toshiba.

Sony will offer some 14 versions of Memory Stick in an attempt to break it out of the digital imaging market, which accounted for over 62 percent of the device's sales last year, said Takemi Sato, manager of Sony's Memory Stick Division. Sony is planning four automotive applications based around location information for car navigation systems, for example.

But mobile connectivity will be the Memory Stick's main target, with a major emphasis on mobile phones and PDAs, said Nagagawa. Accordingly, Sony had executives from Motorola, Texas Instruments and Palm present short-term, if not long-range, plans for Memory Stick at this week's forum.

"We adopted this new media after a lot of discussion," said Eiji Umemura, operations manager at the Japanese unit of Motorola's Semiconductor Products Sector, referring to Motorola's decision to become a Memory Stick licensee. Motorola claims a 75 percent share of the processor segment of the handheld computer market, and said it will add a Memory Stick interface to both its 68k core and ARM-based Dragonball core, Umemura said.

Texas Instruments is unveiling a series of DSPs that sport Memory Stick compatibility, including devices aimed at Internet audio and digital still cameras respectively, said Shinobu Karaki, manager of TI's ASP department.

But Motorola's slides on 2.5G and 3G phones did not indicate whether those systems would support Memory Stick. Similarly, Palm said it would "keep innovating with collaborative partners such as Sony," but indicated it wanted to retain "flexibility" on memory card formats.

Palm's presentation was "quite tamamushi-iro," said a senior manager at a major Japanese semiconductor and computer maker, using a phrase that implies ambivalence. "Everyone says 'Memory Stick equals Sony,' and that is a problem," he said.

Many mobile phone and notebook makers remain noncommittal about their memory card strategies, and some market watchers believe several formats can survive and remain viable in multiple growing end markets. Hitoshi Kuriyama, senior analyst and first vice president with Merrill Lynch Japan, said Memory Stick could do well even if it only landed in Sony products such as GameBoy. "Sony has advantages in planning and promotion, considering its annual shipment volume of electronic equipment, marketing clout and design prowess," he said.

Missing support

But while Aiwa, Pioneer and Sharp have adopted Memory Stick for various products, major players such NEC, Fujitsu and Mitsubishi are officially ambivalent. At the same time, Matsushita and Toshiba are adding SD Card compatibility to a series of products.

"We're not playing favorites with anyone regarding removable storage media," said a spokesman for Mitsubishi Electric Corp., which has released an encryption algorithm that bolsters copyright protection security for the Memory Stick.

Mitsubishi has no consumer products that support Memory Stick at present, but the company is heavily promoting its mobile phones in Japan and plans to introduce models that support Memory Stick "sometime" in fiscal 2002, the Mitsubishi spokesman said.

"This is not something we can do on our own," he said. "Implementation depends largely on carriers in Europe and Japan. After all, it is ultimately up to them to decide what kind of removable storage medium is appropriate. We could just as easily design for other storage mediums like SD Memory, et cetera. We haven't ruled out other mediums."

NEC is still considering the placement of Memory Stick slots in its mobile phones, an NEC spokeswoman said. "We are a member of the SD Card group, but that does not mean we should just use one and not the other. We are considering both," she said.

And though Sony and Ericsson have agreed to merge their mobile phone businesses, Yanaga and other Sony officials declined to say whether Ericsson's phones will support the Memory Stick.