Memory Cards Destined for Slower Growth

April 28, 1995, Cupertino California --  AP Research (APR) has re-examined
its market estimates for flash and rigid disk drives in the PC Card
(PCMCIA) form factor.  Considering all the factors impacting this segment,
APR believes the market is destined to much slower growth.  According to
Andrew Prophet, Principal at APR, "Market growth for flash or RDD cards
will not exceed one million units in 1995."

Mr. Prophet notes to the following factors, which together, point to much
slower growth:

 The lack of robust growth in PDAs, which could have fueled
 memory card consumption.

 MiniStor withdraws from the market and closes its doors.

 Flash suppliers, such as Intel, re-position and aim at lower
 volume vertical markets.

 Maxtor announces it will scale back its R&D effort on 1.8 inch
 drives.

 Intel re-directs its flash card effort toward vertical
 applications in the $100-200 range, where unit volumes are
 modest, margins are wider and markets are still growing.

 Sundisk's reluctance to license its patents on handling of
 processing defects and cell erasure to the PCMCIA, thus
 slowing industry standardization.

 HP's withdrawal of its non-standard 1.3 inch drive.

While at first glance these events appear ominous, APR believes it reflects
a more realistic picture of the market opportunities in this segment.  It
means a smaller market, where turf battles over market share will take on
greater importance.  According to Mr. Prophet, "Developers, manufacturers,
retailers and end-users would be well advised to carefully weigh the
implications of this slowdown."

APR is a market research firm concentrating on PC Cards, SCSI interfaces
and Fibre Channel.  The firm has a consistent record of identifying issues
and trends well in advance of its higher-priced competitors. APR was the
first to alert its clients to:

 - The sharp price erosion in 1993 of fax/modem cards.
 - Pioneering research on CardBus markets.
 - Emerging importance of ISDN cards and video cards
 - The critical role of security cards in the PC Card form factor.
 - The rapid growth of pager cards.
 - The emerging importance of the Fibre Channel markets

For more information on the PC Card markets, contact AP Research.

Contact: Andy Prophet at aprophet@apresearch.com or phone: 408-253-6567
during business hours (Pacific time).
 
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