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Iomega keeps storage in hand

Iomega is the latest to announce a storage alternative for handheld devices.

As the market for miniaturized storage devices for handheld computers gets bigger and bigger, vendors are vying to make the devices smaller and smaller.

Iomega (IOMG) is the latest to announce a storage alternative for handheld devices. It is working on a new storage technology dubbed n.hand that is half the size of a business card and is promised to cost significantly less than current storage options.

But Iomega will have to compete for attention with a growing number of companies announcing new flash memory technology, including SanDisk (SNDK) and Matsushita Electric (MC).

Flash memory cards are currently the most common form of compact storage. They hold 4MB of data even when the system power is turned off and sell for about $160.

However, flash memory is more expensive than hard disk storage but delivers faster access times, and because it has no moving parts, is more reliable than disk drives.

Iomega's alternative to flash cards, n.hand, holds more data while taking up roughly the same amount of space. It will use miniature flexible media disks that can store up to 20MB and be plugged into digital cameras, game devices, cellular phones, or handheld computers. The disks are also expected to cost less than $10 each.

The company is now designing the drives required to read the disks and will license them to hardware manufacturers. The company expects to see devices that use the drives hit the market in the second half of 1997.

At least in the digital camera market, Iomega faces some stiff competition for its new technology. Many of the major camera makers already use CompactFlash technology, and more digital cameras that incorporate the storage technology are on the way.

"The reason we're announcing this technology early is that we obviously want manufacturers to design out flash memory and design this in," says George Meyer, director of new business marketing for Iomega. "This has a true consumable look and low cost like film, and now we can see digital cameras compete against regular cameras using n.hand," he says.

Iomega is also working on plans to make the new technology compatible with future versions of its popular Zip drive by designing a caddy for use with n.hand disks.

Flash card companies are also beefing up their offerings. SanDisk and Matsushita Electric announced that they have developed flash memory technology called Double Density Flash, which doubles the capacity of flash storage products by storing two bits of data in each memory cell instead of one. This increases the size of the chip by only ten percent but doubles the storage capacity.

SanDisk, for one, is also lowering the cost, promising to price the new products 25 to 30 percent lower than their current CompactFlash products. A 4MB CompactFlash card using the new technology is expected to have a street price of around $100, according to the company.

SanDisk says a CompactFlash card, which is approximately the size of a matchbook, will now be available in the 20MB capacity. A Type III PC Card will also be available in storage sizes up to 300MB and up to 150MB for Type II PC Cards. The company will be sell its products to hardware manufacturers and plans to have samples available in the first quarter of 1997.