U3 Smart Technology is an architecture developed by SanDisk for portable applications which can be stored on flash drives and transported easily between PCs. Apparently Microsoft thinks they can help SanDisk do better:
Microsoft Corp. and SanDisk® Corp. today announced they have signed an agreement to deliver a next-generation software and hardware solution to place application programs and personal customization on USB flash drives and flash memory cards, expanding on and replacing SanDisk’s existing U3™ Smart Technology.
Under the terms of the agreement, Microsoft will develop a new software experience and SanDisk will develop new hardware capabilities, including the addition of TrustedFlash™ security technology. SanDisk will incorporate the combined software and hardware solution on removable flash memory cards and Cruzer® USB flash drives. The new offering is expected to be commercially available starting in the second half of 2008.
Effective immediately, Microsoft will engage in discussions with third-party hardware vendors interested in licensing the new software offering. A new entity will be created to license compatible hardware designs, TrustedFlash and other intellectual property from both Microsoft and SanDisk, with revenues to be shared by the two companies.
U3 satisfied a long unmet need and Microsoft is smart not to let it get away.
There was a ray of sunshine for Microsoft’s beleaguered Zune last week when it was reported by market research group NPD that Zune was number 2 in sales of personal media players in its first week on the market. The clouds have come out now though as the Zune was reportedly down to 5th in the next week:
Microsoft Corp.’s Zune device dropped to fifth place from second in the U.S. market for digital media players in its second week in stores, market researcher NPD Group Inc. said.
Zune captured 2.1 percent of the market in the week ended Nov. 25, said Stephen Baker, an analyst at Port Washington, New York-based NPD, in an interview today. Baker said Apple Computer Inc.’s iPod remained the leader, with 39.4 percent that week, based on units sold.
Zune’s market share declined as SanDisk Corp. boosted sales with a 50 percent price cut on its media players, taking a 39.3 percent share and knocking Microsoft from the No. 2 spot it occupied in its first week in the market.
Whew, those SanDisk guys play rough – they just missed knocking Apple out of 1st.
Creative Technology Ltd. was third, while Memorex International Inc. was fourth. Walt Disney Co. tied for fifth place with Microsoft.
If the Disney name is unfamiliar in this context, you may not realize that they make MP3 players for kids.
Microsoft’s much maligned Zune personal media player got some good news today when market research firm NPD reported that in their sample of brick and mortar store sales it had edged the SanDisk Sansa products to claim the number 2 spot after Apple’s iPod. Todd Bishop at the Seattle PI:
After a bunch of negative reviews and one particularly awkward moment on national television, there’s a sliver of good news for Microsoft’s Zune initiative today. But it might be fleeting.
In its first week, Zune secured the No. 2 spot among portable media players, well behind iPod, but edging out previous second-place holder SanDisk, according to data released by the NPD Group today. Zune won 9 percent of the U.S. market, measured by unit sales, and 13 percent of dollar volume for the week ended Nov. 18, NPD reported.
The iPod represented 63 percent of unit sales and 72.5 percent of dollar volume for the week.
And the reason why the good news may be fleeting is that the general belief is that while the launch on Nov. 14 stirred interest in the Zune, it has been downhill from there.
Also, even the first week’s news isn’t unalloyed according to David Ellis at CNNMoney:
Another research agency, Current Analysis, reported a somewhat similar sales reading during the same week. For the same week ending November 18, 2006, the Zune took 7 percent of the MP3 player market, falling behind both Apple and Sandisk.
While the two reports look strictly at sales at major U.S. electronics retailers, online sales of the Zune appear not to be as favorable.
The verdict on Zune’s debut will more properly be delivered when the full holiday shopping season numbers come in, but I suspect we’ll see plenty of interim prognostications between now and then.
Other Zune news:
It’s no secret that Microsoft’s erstwhile PlaysForSure partners are a trifle miffed that they were abandoned to to continue the losing battle against Apple’s iPod/iTunes juggernaut while Microsoft blithely went its own proprietary way with the upcoming Zune. As announced last month, number 2 player maker SanDisk and media service RealNetworks have left the PlaysForSure camp to provide their own competitive player/online music store structure and today RealNetworks buffed up their part of the deal:
RealNetworks launched twin salvos Thursday against Microsoft‘s forthcoming Zune portable music player and Apple Computer‘s iPod player and iTunes Store.
Real said it has joined with big-box retailer Best Buy to launch a new Best Buy-branded digital music store powered by Real’s Rhapsody digital subscription service. The new store, which will be launched Oct. 15, will be similar to Rhapsody but will also feature exclusive content acquired by Best Buy.
Separately, Real launched an updated version of Rhapsody that can review a subscriber’s Apple iTunes library of purchased and ripped tracks and recreate it in their Rhapsody library in the form of downloadable subscription tracks at no extra charge.
The latter sounds like the popular Zune rumor that didn’t pan out, although recreating the library in subscription form isn’t quite the same as providing the tracks for free. As for sidekick SanDisk:
The moves reinforce Real’s announcement last month of a partnership with portable music player manufacturer SanDisk to sell a Rhapsody-integrated line of Sansa e200 series MP3 players. Best Buy will sell and promote Rhapsody-integrated Sansa players. In addition, the updated Rhapsody software will allow subscribers to transfer downloaded music to Sansa e200 players at about twice the speed as is possible with other subscription-compatible MP3 players.
It looks like Microsoft has managed to create another competitor with clout before they even get Zune out the door.