Summary
Many PC makers are not including optical drives, especially for laptops and netbooks. Leaving out optical drives is being done not to reduce cost but to allow slimmer laptop and netbook computers. Flash memory with built in programs and entertainment content are now on the market in USB as well as memory card formats. Downloading content and applications has become more common, replacing one of the big uses for optical drives in computers. As flash memory $/GB declines and as write speeds for flash devices improve will these devices replace current optical disk physical distribution formats?
Analysis
In the last couple of years netbook computers have become quite popular due to their low prices and portability. One of the ways these computers reduce their footprint is to remove the large 5.25-inch form factor optical disc drives that have been common is computers for years. The optical drives are very inexpensive and were a common way to load applications and either download or play content. The trend of removing optical disc drives from computers is now starting to move into the more powerful laptop computer market.
Downloading applications and content from the Internet and distribution of content and application on flash based media could make optical discs unnecessary in computers. Many computer users buy their applications and content online and install directly on their computers. This avoids using and storing optical discs but it does raise a potential issue if the application or content needs to be restored. Backup of data, including installation files is important to avoid this problem but computers users are not always faithful in backing up their computers.
Another approach that preserves a physical copy of an application or content is to move to flash memory based physical media such as USB sticks or flash memory cards (such as SD cards). Many companies are now offering their software applications on USB sticks (including Microsoft’s Windows 7) and there are USB sticks now on the market that include movies and other entertainment content. SanDisk has made a couple of attempts to introduce flash memory card based music distribution. The latest from the 2009 CES is called Slot Music. Although it is not clear that USB or flash card entertainment content distribution has caught on yet there are reasons to think that this could happen.
Optical disc storage technology has been advancing at a much slower pace than flash memory. Consumer optical disc storage capacities are changed only every few years. The last big format introduction was high definition video formats (now represented by Blu-ray discs).
On the other hand the price per GB of flash memory has been dropping at an average rate of about 40-50% annually. Current consumer flash prices are on the order of $1/GB so a 25 GB flash card or USB drive could cost about $25 which is close to the price of a similarly sized Blu-ray disc. This is a bit of an unfair comparison since the actual cost of pressing and packaging a Blu-ray disc is probably less than $2.00. However, in a few years continuous price reduction it will be possible to buy 25 GB of consumer flash memory for less than $5, approaching the raw costs for Blu-ray optical discs.
Application loading and content playout applications utilize flash memory’s strengths since they can play out content or applications much faster than mechanical devices such as optical discs. If the write speeds for mass writing USB or SD cards can be increased along with lower overall storage capacity costs, optical discs could be replaced in many computer and consumer applications by flash memory within the next few years.
Thomas Coughlin consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
