Anti-Piracy Memory Chip Arrives
By Dean Takahashi, San Jose Mercury News, Calif.
Sep. 27–Memory chips are supposed to be commodities. Especially the flash memory chips that SanDisk makes for storing digital photos, music files, camcorder videos or other content. But the Sunnyvale company will unveil today a new kind of chip, contained on a storage card, that it hopes will set its brand apart and usher in a new era for enjoying portable entertainment.
The chip design company is introducing TrustedFlash, a memory chip with built-in security that prevents illegal copying. That could help calm the tension between the entertainment industry that wants strict controls on intellectual property and technology companies that want digital content to be freely transferable to cell phones, music players, computers and other gadgets.
Eli Harari, chief executive of SanDisk, said in an interview that the new chips create more options for both entertainment companies and consumers alike. The entertainment companies can sell their songs, movies or games in different ways, and consumers can buy and view the entertainment where they want and whenever they want, as long as they pay for it.
“We have worked on this for three to four years,” Harari said. “The toughest thing was to convince the studios that this was more secure than anything else out there.”
SanDisk has persuaded some industry players to use “gruvi,” which will be the brand name for TrustedFlash in the entertainment category.
Among the music industry providers adopting it are EMI Group and Yahoo Music. Meanwhile, cell phone maker Samsung Mobile Communications, pay-TV company NDS, and portable video software company Packet Video are also supporting SanDisk’s technology. Samsung’s phones, for instance, can play music on the memory cards.
Harari said his firm worked with companies in the entertainment, security and cell phone industries in order to pull together its product. To create the device, SanDisk had to build a lot of computing power into what would otherwise be a dumb memory chip.
“This is going to accelerate the shift of music into cell phones,” said Satya Chillara, an analyst at American Technology Research.
With the TrustedFlash chips, music studios can release albums or whole collections of musical groups on a single memory card that consumers could buy at stores and insert into their phones, MP3 players or laptops. They can listen to the music tracks they paid for, or pay additional money to get a security code that unlocks additional songs. The unlocked song might be already stored on the memory card, or the consumer could download it from a Web site or phone service onto the memory card.
Today, much of a consumer’s digital content is held hostage on a particular kind of device, such as an iPod or a PC, because that is the only way to prevent massive piracy. But with the SanDisk flash memory card, a consumer can move the digital content to another device. If the music company insists the data can only be copied five times, the memory card itself enforces that policy in the new device, be it a cell phone or music player.
Harari says this is SanDisk’s latest effort to set itself apart from much bigger rivals, which include Samsung Electronics, Micron Technology, Toshiba and others.
Harari founded the company as SunDisk in 1988 to popularize flash memory — which stores data permanently on a silicon chip — as a replacement for hard disk drives. In 1991, the company shipped its first chip, which stored 4 megabits. Sun Microsystems complained, so after seven years Harari changed the name to SanDisk.
For many years, hard disks outran flash memory’s storage capacity and speed. SanDisk licensed other chip makers to make flash memory cards, but as it grew, it decided to ship memory cards directly to retailers under its own brand. SanDisk’s memory cards are now in more than 100,000 stores.
Today, a flash memory card, which can contain multiple chips, can store hundreds of songs or dozens of digital pictures.
SanDisk’s latest flash chips can each store 8 gigabits, or more than 2,000 times the amount they could store 14 years ago.
Because the flash chips are so small, they’re the storage medium of choice in many MP3 players, camcorders and digital cameras. Better still, many mobile phones now include the slots for cards like SanDisk’s as a standard feature. SanDisk, accordingly, generated $1.8 billion in sales last year and it now employs 1,000 people.
And, in direct competition with Apple Computer’s iPod Shuffle, SanDisk started selling its own SanDisk-branded flash-based music player. The product is struggling to gain market share, but SanDisk gets its chips at half the cost other companies pay, and that should benefit it in the long run, Chillara said.
Now the company’s newest TrustedFlash chips could help it pull away even further from its rivals, Harari said.
“This is an important step up the food chain,” Harari said. “We can become a much more important link in the delivery of premier entertainment content in mobile devices.”
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