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Sony, Apple Seek Fame With a Little Flash

Once a business storage tool, Flash drives are becoming the profit-maker of choice for digital music player manufacturers like Sony and Apple . And they have the enterprise reeling over their storage ability.

One only has to look as far as the latest generations of the Walkman and iPod shuffle to see the phenomenon in action. Both devices are smaller and lighter than a pack of gum and hold as much as 1GB of music and/or data.

Sony Walkman
Sony Flash Walkman
Source: Sony

Sony's latest line of digital music players includes a song display and has approximately 70 hours of battery power. The entry-level Walkman comes with 256MB of Flash memory and retails for about $90. The high-end version supports 1GB of storage and sells for more than $300.

Apple released the iPod shuffle, its Flash drive music player, in January. The device comes in two versions: a 512MB model that holds up to 120 songs for $99 and its 1GB cousin that costs $149. The devices come without a screen but are compatible with either Windows or Mac computers.

USB Flash drives are touted by manufacturers as being easy-to-use, as they are small enough to be carried in a pocket and can plug into any computer with a USB drive. They have less storage capacity than an external hard drive, but they are smaller and more durable because they do not contain any internal moving parts.

Market research firm Web-Feet Research forecasts that the worldwide market for USB Flash drives will reach $4.5 billion in 2006 and $5.5 billion in 2007.

The company that revolutionized the way consumers carry their music has been looking for ways to upset Apple's iPod cart. Apple holds about 60 percent of the portable music player market, according to Nielsen SoundScan.

The company says a revitalized Walkman could catapult the Japanese company into a strong second place in front of similar Flash drive music players from SanDisk, Philips or Samsung.

iPod Shuffle
iPod Shuffle
Source: Apple

"The digital player market is still in its early stages," Gregory Kukolj, a general manager for Sony told Reuters. "In the European Union alone the personal audio market is 20 to 22 million devices a year. More than 10 million of those are CD portable players ... there is a huge opportunity."

And even though these bulked-up USB Flash drives are being touted as music players, Enderle Group founder and industry analyst Rob Enderle noted that there is a fear of them in the enterprise.

"Companies are scared to death that employees are downloading files into their iPods and taking them home," Enderle said. "It's enough of a security risk that some government accounts are turning their USB ports off. They want to get rid of their pin-attached PS/2 keyboards, but they can't because of security concerns with iPods and other USB-attached storage.

"There are settings in the operating system that you can make to make it difficult to download files from a USB device, but it's not completely effective."