SD Memory Cards to Drive Market for Digital Content

The future of digital content is a memory card about the size of a postage stamp, according to research conducted by Aberdeen Group for the Internet Home Alliance.

The Boston-based research firm and cross-industry network of companies – which boasts a roster of members ranging from Cisco and Microsoft to Sears and Whirlpool – finds that consumer adoption of memory cards will continue to grow and that SD (Secure Digital) memory cards are becoming the leading format for storing and transporting digital content.

The postage-stamp size SD Memory Cards hold from 8MB to 4GB (expected by end of 2004) of data and are ideally suited for transferring and storing images, video, music and other types of digital data. According to Panasonic, a founding member of the IHA and a member of the SD Association, a 512MB SD Card can store up to 7,000 JPG images, up to three hours of MPEG4 Video and up to 11 hours of digital music.

“SD memory cards are likely to continue becoming a widespread means of storing and transporting digital content,” said Peter Kastner, executive vice president and chief research officer, Aberdeen Group. “This is particularly true given the combination of technology and widespread industry support that the SD Memory Card enjoys.”

According to the study, SD memory cards lead all other formats both in terms of number of products and number of product categories, with over 1,300 SD-enabled products available worldwide. Aberdeen reports that the format held a 25 percent U.S. market share in the first half of 2003.

Jeff Cove, Panasonic’s vice president, Strategic Alliances and New Business Development, compared the use of SD cards to the early days of information-sharing on PCs. “The first steps of networking were sneakernet. You had the devices and needed a way to move data among them.” The capability to download your favorite music to a memory card, which you can then play on your SD-enabled car audio system is part of the promise “transporting data in the Internet lifestyle,” Cove said. The high speed (up to 10MBs per second) and high capacity of SD memory cards will make downloading your digital content to a tiny card practical.

Inside the home, some devices will surely share information via Wi-Fi or Bluetooth wireless networks as well cable-based networks, but Cove said it’s not an either-or case. “SD memory cards aren’t used in lieu of wired or wireless network.”

IHA members wanted to “better understand the role of memory cards in achieving that fully networked lifestyle,” Cove said. “IHA is a point of collaboration and allows us to facilitate such market research.” The Aberdeen research, which is based on eight focus groups (four each in Boston and San Diego) cites the following findings

  • Consumers’ desire to move digital content around is strong and transferring digital content among devices is becoming a mainstream activity.
  • Memory card awareness tends to begin with the purchase of a digital camera. The memory card format of a digital camera may drive format loyalty and the purchase of other memory card-enabled digital devices.
  • Consumer education is critical to driving memory card sales and usage. Many consumers were not aware of the full capabilities of memory cards (or even identify what type of memory card they owned). However, most were easily educated and wowed by the versatility and networking capabilities of the SD Memory Card.
  • On one hand, consumers love the small form factor of SD memory cards. On the other hand, the small form factor is viewed by some as disadvantage as the memory cards can be lost easily.
  • More is better when it comes to capacity but only to a certain (price) point. Larger capacity cards are clearly preferred by consumers, although prices over $100 were considered less attractive.

“These findings are consistent with the research about memory cards that we’ve conducted at Panasonic,” Cove said. “The future for the SD memory card and SD memory card-enabled digital products is bright due to its superior technology and widespread industry support.”

Hewlett-Packard, also a founding member of the IHA, concurs with Panasonic and about the Aberdeen research. “Our view is that consumers are getting much more interested in, and savvy about, moving content among cameras, PCs, PDAs, TVs and printers,” Charles Shilling, head of consumer card strategy at HP, said. “The SD format is where the consumer market is headed.”

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