Nine months have passed since US Ram maker Visiontek predict that the memory shortages fore-casted for late last year would not materialise.
While analysts scoffed at the time, they are now eating their words. There are no long-term memory shortages, even though the industry has migrated from regarding 4Mb to 8Mb as standard on an entry-level machine.
According to Sukie Read of market research firm Context, there has been a trend towards higher memory specification over the past year. Just two per cent of all machines sold in the UK channel in March had 4Mb, compared with 31 per cent a year ago. Sales of 8Mb systems have fallen slightly.
They now hold a market share of 46 per cent, compared with 48 per cent this time last year. Read says the reduction was due to an increase in the sales of 16Mb systems - 38 per cent in March this year, compared with 17 per cent a year ago. And 32Mb systems, which had two per cent of the market in March 1995, now account for 10 per cent.
Visiontek managing director Brian Abrahams said that while memory shortages were not expected, prices could well rise. 'While it might increase their stock price in the short term, companies which are warning customers about a chip shortage are really crying wolf.' Abrahams predicted that memory will become unavailable only if W95 sales demonstrate memory requirements beyond what is expected.
W95 has pushed up memory prices, but the bad news for dealers is that few existing Windows 3 users are migrating to W95. The bulk of W95 users are those who have bought a new machine. Companies are fighting shy of W95, so business resellers have yet to see the surge in memory-only sales that Microsoft predicted in the pre-launch hype for W95.
The increase in prices has given some memory vendors the impetus needed to expand their business operations. Only last month, Danish computer memory products vendor Mercury Card Technology opened for business in the UK, after having already opened sales offices in Germany and the US. Derek Allen, the company managing director, says that although the UK's memory card market is crowded, the company is benefiting from being a European rather than a US or Far Eastern operation. 'Even though there are Far Eastern companies operating in the UK, the foreign company ethos still permeates,' he says.
Allen says the decision to open the UK office in Colnbrook was taken because the town is about three miles from Heathrow Airport. 'We are less than an hour away from most European destinations which enables us to offer next-day delivery. Because we are manufacturing the memory cards within Europe, we are not liable to the external tariffs and taxes that foreign companies must pay to import into Europe. That's a significant price advantage,' he says.
W95 is not the only leverage the industry has in getting users to move to higher memory specification machines. Last year, Elonex Technologies' R&D operation announced it was working with Micron Technology to develop system board designs that support the emerging Burst EDO Ram standard.
Elonex Technologies' president Dan Kikinis says: 'We believe Burst EDO technology offers significant advantages over synchronous memory as it delivers similar PC performance gains at a lower cost. That enables us to design faster systems without charging premium prices.'
According to Kikinis, systems incorporating support for Burst EDO will feature DRam bus speeds from 40MHz to 66MHz, 'way above the 33MHz bus speeds achieved by fast page mode or EDO DRam technology'. Since Burst EDO is supported as a bond option on high-volume DRams, he believes the transition to the new technology can follow a migration path similar to the conversion from FPM to EDO.
Micron Europe technical marketing manager Paul Watkins says 16Mbit DRams offering zero wait-state performance at 66MHz bus speeds are in production. 'Elonex's development engineers are likely to have systems ready to ship when we start manufacturing Burst EDO Simms in volume,' he says.
Another imminent arrival sure to boost dealer memory sales is the miniature card technology (MCT) system by a cross-industry group of semiconductor makers and electronics manufacturers. MCT is a digital memory system that offers greater capacity storage of voice, text and image data in a package one quarter the size of a PCMCIA card.
Mike Beirne, a representative for Fujitsu, one of the companies behind the standard, said the system will show how flash memories can change the market. Beirne says the card was designed to be integrated into a variety of next-generation products such as mobile communications devices, portable data terminals, audio recorders, PDAs and digital cameras.
It measures 38mm wide x 33mm long x 3.5mm high and has a pinless connector to ensure ruggedness in consumer use. Each card can accommodate up to 64Mb of flash, DRam or Rom memory based on current sizes. Beirne believes the incorporation of 64Mb of flash memory into a card about a quarter the size of a PCMCIA card will open new avenues in data storage. It will mean the debut of portable devices that feature a large storage capacity and no need for battery backup as flash memory can retain data even when power is disconnected. MCT already has a consumer name, the solid state floppy disk card (SSFDC).
Three camera companies, Fuji Film, Sega and Olympus, have adopted the technology for their next generation of digital cameras. The MCT system has two main components: the SSFDC and an adaptor. The floppy disk-shaped card measures 45mm x 37mm x 0.76mm and incorporates a 16Mbit flash Eprom chip. The adaptor accepts the SSFDC and plugs into a standard PCMCIA slot.
But dealers wanting to stock up on memory chips should check their chip sources as counterfeit memory chips are a widespread problem. NEC has been affected by counterfeiting. It discovered below-standard memory chips illegally bearing its name when manufacturers in South East Asia and the US complained about the quality of the chips. NEC launched a full-scale investigation and traced the chips to their source in Taiwan, but the company that illegally rebranded them has not been named. The chips are believed to be factory rejects from rival international electronics companies.
So far the only counterfeit NEC devices discovered have been DRam chips mounted in Simm packages. The Simms contain between one and four Mbit DRam memory chips and have been selling for about $100. NEC says dealers can check their authenticity by examining the packaging and printing.
The counterfeit items have the NEC name printed in erasable ink, whereas the originals contain a laser etching to permanently mark the package.
Since the products are sold through unauthorised channels, NEC will not offer rebates or refunds on counterfeit products.
That should be a warning to dealers which fulfil their customers' needs with cut-price chips. With a trend towards greater memory requirements and constrained budgets, dealers should look to make a profit from sales of legitimate cards to memory-hungry business users wanting to move up to the latest technology.
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