Price dip on the cards

Customers can look forward to getting more for less!

Prices for flash memory cards - he little modules used by digital cameras, handheld organisers, MP3 players and cell phones to store pictures, music and other data - are headed down - way down. Past trends suggest that prices will drop 35 per cent a year, but industry analysts think that rate will be more like 40 or 50 per cent this year and next, due to more manufacturers entering the market.

These cards have become a booming business because so many pocket-size gadgets rely on their ability to retain data used on them even when the power is off. But the market has yet to settle on one shape and size. As a result, the market has yet to settle on one price for any given allotment of memory either. Browse Amazon.com for cards made by Lexar Media, one major supplier, and you'll find a wide range of costs.

Try looking for 256-megabyte cards, the most popular capacity. Some time back, CompactFlash or SD Cards sold for $56.99. But a 256MB Memory Stick went for $85.49, and a 256MB xD-Picture Card topped out at $88.34.

Since most digital cameras and other handheld devices either come with tiny "starter" cards or don't include any at all, most customers have to buy extra cards.

But if all these cards pack the same basic kind of memory, shouldn't they cost the same?

The physical size of memory cards doesn't explain the difference; although CompactFlash modules are the biggest around, SD Cards are the second-smallest format. Licensing costs, however, can have a major affect. No one company owns the decade-old CompactFlash format, while Sony alone controls Memory Stick technology, and Fuji and Olympus jointly hold the xD format, the newest of those four.

Competition

Simple competition also plays a role. Numerous factories crank out CompactFlash cards, while relatively few make Memory Sticks or xD cards.

In some cases, the price reflects what companies think the market will bear. "If the market accepts that price, that's the way it goes," says Jim Hegadorn, director of technical and media services at FujiFilm USA, Inc., a co-owner of the xD format.

Mike Kahn, Sony's senior product manager for Memory Sticks, said the smaller size of Memory Sticks and such extra features as circuitry to enforce copying restrictions make them costlier to make than other cards.

Will these price trends push one format out of the market? Savvy tech consumers always worry about obsolescence, and there are no guarantees that these formats will all stick around. By most estimates, SD is now the most popular format, followed by CompactFlash, Memory Stick and finally xD.

When Fuji and Olympus debuted the xD-Picture Card two years ago, they stopped using the older SmartMedia format, effectively scuttling it - a rude surprise for some digital camera owners who now have a hard time finding SmartMedia cards. Flash memory seems fated to become more and more of a commodity - the research firm Gartner forecasts that the average price per megabyte will plummet from 13 cents today to 1.6 cents in 2008.

Manufacturers, however, will keep trying to make their products seem different from the competition, and therefore worthy of a higher price. The latest twist is the promise of faster performance, advertised with words like 'Pro,' 'Ultra' or 'Extreme.' But while such cards do let users transfer files more quickly, Gartner analyst Joe Unsworth says that memory card makers don't use the same set of measurements in their marketing, making comparisons difficult. What's more, he says, they all use test results that may be valid in the lab but don't hold up in the real world.

"There's a lot of funny business going on in the market," he says.

- Los Angeles Times-Washington Post News Service