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SanDisk stakes its future on TrustedFlash

update New cards let consumers move digital video and music among devices without violating copyright protection. Photos: Musical memory cards

update SAN FRANCISCO--SanDisk is planning to launch new mini storage card technology that it says will let people play or view secured content on multiple devices, including smart phones and portable digital players.

As , the TrustedFlash technology embeds digital rights management software right on the card instead of relying on the player to dictate where and when content can be played. SanDisk, which helped pioneer flash memory storage cards used in phones and digital cameras, announced the new technology on Tuesday.

"We think this will be a disruptive technology, but will enable a whole new world of opportunities in the mobile market," said SanDisk Chief Executive Eli Harari during a press event at the CTIA Wireless show taking place here.

SanDisk cards

The first batch of cards using TrustedFlash, due in November, will be preloaded with the Rolling Stones' new CD "A Bigger Bang." The 265MB card will cost $39.95.

Internet media company Yahoo said customers who subscribe to its digital-music service could use a different version of a TrustedFlash card, which will be sold under the name Gruvi (pronounced groove-eye).

Samsung Electronics also said it would support Gruvi in its next generation of phones that support SD cards.

More than 87 million phones with memory card slots were sold in 2004, according to IDC, which forecasts that 164 million will be sold worldwide in 2005.

Harari said the TrustedFlash card would behave in the same way current SD cards do, but the technology could also be extended to on-demand content such as feature films and online games.

Showing off how the technology works, SanDisk demonstrated how a consumer could purchase a video online, view it on a home PC, save it to the TrustedFlash card and then insert the card onto a personal digital assistant to view later.

"How the content is seen really depends on the content provider," said David Guidry, SanDisk product marketing manager. "With music, it's pretty consistent formatting, but with movies, the codec (compression-decompression technology) changes from larger screens to smaller ones. This is a work in progress, to be sure."

TrustedFlash is expected to eventually be included in SanDisk's array of flash-memory products, including its miniSD, microSD and SD card formats with a maximum capacity of up to 2GB.

NDS Group, which makes content protection software for DirecTV, is the brains behind the TrustedFlash technology. Click&Buy, a New York company that makes e-commerce software, is also helping SanDisk with payment aspects of TrustedFlash.

CEO Harari said the cards would cost a bit more than SanDisk's current storage card products, whose average retail price is about $50 for 512MB.

Harari said that by the end of 2007, once the cards are widely used by technology and entertainment companies, he expects them to bring in sizable revenue for the company.

"This will take one or two years to become a very substantial business," Harari said after the conference.

Harari also said SanDisk would remain neutral to any specific content protection software such as Apple Computer's FairPlay, Microsoft's "Janus" Plays for Sure or digital rights protections supported by Open Mobile Alliance. He invited each to consider using TrustedFlash in tandem with their own content protections.

"I'm not going to tell Steve Jobs what to do, because he's a genius, but if Apple were to use their FairPlay digital rights management along with our TrustedFlash, they could rule the world," Harari confided.

SanDisk also announced a new high-speed NAND flash storage device called iNAND that is based around its TrustedFlash technology. NAND flash memory is widely used in consumer devices like digital cameras, cell phones, USB flash drives and portable music players.

SanDisk is producing the devices, which are about the size of a quarter, in capacities ranging from 256MB to 4GB and expects them to debut in October with a complete rollout to be completed in March of next year. The company said the devices are smaller, faster and use less power than similarly configured hard drives. Pricing for a 2GB iNAND will cost manufacturers $95 in bulk quantities.

Reuters contributed to this report.

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