SanDisk Memory Sticks: Lexar responds!
By
Mike Tomkins
(Monday, September 10, 2001 - 01:46 EDT)
Comments from the only third-party manufacturer of Sony's Memory Stick flash cards on their rival's announcement makes for interesting reading...
On Thursday of last week we published news from flash manufacturer SanDisk Corp. that the company would soon begin selling rebadged Sony-manufactured Memory Stick flash cards under its own name. The announcement also noted that SanDisk would cooperate in developing next-generation Memory Stick cards with Sony, which it would manufacture and sell itself.
Shortly after posting the item, we have received commentary from SanDisk's biggest rival - Lexar Media Inc. - a company which itself signed a deal with Sony in January 2000, and licensed its high-speed controller technology to the Japanese electronics giant. Lexar is currently the only company manufacturing Memory Sticks other than Sony, and the company has had a somewhat turbulent past relationship with SanDisk.
Most notably amongst his comments, Lexar's General Manager, Business Segment, James Gustke noted that the specification for Sony's next-generation Memory Stick is almost complete (suggesting SanDisk would have little involvement in the process). He also suggested that, far from helping to develop the next generation Stick, SanDisk would have to negotiate a license to Lexar's patents before they would be able to manufacture any next-generation Memory Sticks - something they have not yet done...
With his permission, Mr. Gustke's exact comments to us follow: "SanDisk has no rights to manufacture the current version of the Memory Stick. SanDisk will simply be purchasing the Memory Stick from Sony and reselling it to retailers. Sony will completely control SanDisk's price and allocation. Lexar, of course, has manufacturing rights to the current version of the Memory Stick. We have developed our own Memory Stick controller and are manufacturing Memory Sticks today.
SanDisk claims that it is co-developing the Memory Stick with Sony. Over the last two years, Lexar has given extensive input to Sony regarding the development of the next generation Memory Stick. That specification is nearly complete. For SanDisk to claim it will now jointly develop that product with Sony is laughable.
Notably, the agreement did NOT mention that Sony would be obligated to purchase any flash from SanDisk -- as it is unlikely that SanDisk can be cost competitive with Sony's other key suppliers such as Samsung (Lexar's flash partner).
We believe SanDisk will need a license to Lexar's patents to manufacture future versions of the Memory Stick and have not yet begun those negotiations."
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