SanDisk Flash Drives Enable Talk On Skype

SanDisk Corp. said Monday its begun shipping USB drives to retail stores preinstalled with Skype's VoIP software.

Plug earphones with microphone and the SanDisk drive into a PC. A phone keypad pops up on the PC's screen allowing consumers to make free PC-to-PC calls to Skype users in most major markets.

On the SanDisk drives, consumers will find a bundle of four applications that consumes about 40 MB of storage space on either the Cruzer Micro or the Titanium flash drives. Aside from Skype, the drives include a password-protected synchronization tool, antivirus software, and password manager application that can remember passwords for online trading and banking.

The pre-laded applications are based on U3, a technology SanDisk co-developed that provides application developers, such as eBay Inc.'s Skype, with a standard platform to create apps for portable devices.

Carlos Gonzalez, SanDisk's senior director of USB product marketing, believes adding the software could sway a consumer's decision on which drive to buy as they stare at a retail store shelf filled with USB drives from SanDisk, Lexar, PNY and others. "You have to give consumers more for their money, and this could create a nice differentiator for us," he said. "It remains to be seen whether people initially recognize the value."

Ultimately, it's about setting one manufacturer's flash drive apart from another. Business travelers might find the service helpful, especially when traveling overseas. Skype works anywhere there's a PC and broadband connection.

The service doesn't run on the Apple Mac OS platform, yet, SanDisk said. But Window's users can plug the device into any PC or laptop running Windows. The flash drive loads and holds the software; then removes it when unplugged.

Keeping the phone conversation private in a public Internet Caf will require a headset with microphone, which doesn't come with the flash drive and software.

"Take along a headphone with microphone," said Jan Dawson, principal analyst at research firm Ovum. "Not many have picked up on the fact that the software isn't enough, unless they don't mind everyone listening to the conversation."

Hooking up with SanDisk could turn lucrative for Skype, as well. SanDisk ranked No. 1 in market share last year, according to iSuppli Corp. The El Segundo, Calif., research firm estimates SanDisk garnered $346 million of the $2.8 billion in total USB flash drive revenue, or 12.2 percent global market share.

But SanDisk and Skype face competition from a range of telecommunications companies. Vonage in June introduced V-Phone, a telephone application installed on a USB flash drive. Plug the drive into any PC and a phone keypad pops up on the screen. The V-Phone comes with earphones, a microphone and unlimited calling plans.

Users also can receive calls and direct them to a cellular phone. Vonage sells the V-Phone for $40 plus a $9 activation fee, and you get a new phone number with the service. The new SanDisk drives, with a Skype logo displayed on the package, will sell at retail stores, such as Best Buy Inc., Wal-Mart Stores Inc., and Office Depot Inc.