SanDisk's flash memory chips and cards can be found in mobile devices all over the world. But the company's attempts at making music and video players that would compete with the iPod haven't taken off. SanDisk is the second-leading maker of MP3 players, but Apple's got 70 percent of the market and SanDisk has only around 8 percent.

Harari admits that Apple's tough to beat in the music player category. But he's looking forward to watching mobile phones--such as Apple's iPhone--grow more and more sophisticated. More applications and data will require more storage, which people will want to move between devices. And that's exactly where SanDisk comes into play.

Harari admits that Apple's tough to beat in the music player category. But he's looking forward to watching mobile phones--such as Apple's iPhone--grow more and more sophisticated. More applications and data will require more storage, which people will want to move between devices. And that's exactly where SanDisk comes into play.

The company also stands to benefit from the introduction of flash memory in notebook PCs; assuming flash makers and PC companies can reach a consensus on the development of hybrid hard drives that promise to boost performance and reduce power consumption.

Harari sat down with CNET News.com recently to discuss the ongoing trends in the flash market, Apple's music player prowess, and even the future of software on mobile devices.

Q Let's start with SanDisk and the music player business. What do you think about that market these days, given your position and Apple's position? Harari Let's start with the Sansa Clip (announced that day by SanDisk). If you compare the Sansa Clip with the iPod Shuffle, for 1 gigabyte it's $39.95 versus $69.95 (actually $79 for the iPod Shuffle). It's got an FM radio, it's got a display, it's got a shuffle mode. Let's say you want an iPod Nano as your first MP3 player, if you want a second device you really ought to get the Sansa Clip; there's no question about it, it's a great product.

Well, if you started with an iPod why wouldn't you just continue with an iPod? Harari If you want to stay within the closed system and you don't want Rhapsody, you don't want Napster, you don't want Yahoo Music, you don't want Wal-Mart music store or you don't want Amazon music store, then stay with the Shuffle.

Why is it that despite some of these features and despite more of the choices in music services that you can offer people, no one has managed to make a dent in Apple's market share? Harari Because they're very good. You've got to give them credit where credit is due. But the value proposition with a Shuffle is just not there and people have been buying the Shuffle because, frankly, there has been no alternative for that.

Can you take the 30,000-foot view for a moment? When you look at the company and where you want to take it over the next one to three years, is SanDisk going to be known more as a supplier of this consumer electronics gadgetry or will you concentrate more on the manufacture of memory? Harari We are very, very good at the manufacture of flash memory. I believe we are as good as any company out there and we certainly plan to continue to be very focused on that together with our partner Toshiba, but we do want to move up the scale.

Our vision of the music environment, music and video, is that it's real, and it is in fact converging very quickly on the cell phone. The cell phone really ultimately is your multimedia platform. Apple has in fact conceded that by putting so much behind the iPhone,...basically they're seeing the same trend as everybody else is seeing.

The iPod has sold 100 million (units) in the first six years of the product, which is phenomenal success but it's (a fraction of) the number of cell phones that the cell phone industry is shipping every month. We will be very focused on providing storage and secure storage and removable storage that moves from one handset to another, that allows you take your music with you or your video clips with you from one environment to another.

Are you working on a phone design of your own? Harari Well, we never preannounce products. But I believe that in the next two to three years everything will be wireless, every kind of device would be wireless connected to everything else and therefore the distinction between a cell phone or an MP3 player is going to be somewhat blurred.

It's very difficult for me to see us trying to out-Nokia Nokia. Nokia certainly is a very good customer of ours, but where we can add value to Nokia or to Sony Ericsson or to Motorola or Samsung is to add value to make their phones more attractive. That would be our inclination.

Can you help us understand strategically how far you see yourselves going upstream? Give us a broader understanding of what you think the company should aim at, where do you see it evolving? Harari First of all, we are absolutely focused on mobile platform. The mobile platforms that we're talking about are all moving to very intelligent devices that are wireless to communicate with each other.

Copyright: news.com



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