Pre-PMA 2004: SanDisk has today announced a new line of inexpensive flash memory cards designed to allow users to save their pictures indefinitely without using a computer for downloading, thus giving millions of consumers a major incentive to switch from film to digital photography and providing them with a durable, permanent way to store a lifetime of images. With an initial suggested retail price of $14.99 each-a breakthrough in the industry-the Shoot & Store™ cards are expected to allow people to order prints on a "cost-of-use" basis that is equal to or less than that of traditional analog film. And they won't have to worry about leaving expensive flash memory cards with retail photo finishers.

Press Release:

SANDISK ANNOUNCES SHOOT & STORE, THE WORLD'S FIRST "CONSUMABLE" FLASH MEMORY CARDS FOR DIGITAL CAMERAS

Inexpensive Cards Offer Permanent Storage, Eliminate Computer Downloading And
Will Reach Mainstream Consumers in Drug Stores, Supermarkets, Convenience Stores

LAS VEGAS, NV, Feb. 11, 2004 - SanDisk Corporation (NASDAQ:SNDK) today announced a new line of inexpensive flash memory cards designed to allow users to save their pictures indefinitely without using a computer for downloading, thus giving millions of consumers a major incentive to switch from film to digital photography and providing them with a durable, permanent way to store a lifetime of images. With an initial suggested retail price of $14.99 each-a breakthrough in the industry-the Shoot & Store™ cards are expected to allow people to order prints on a "cost-of-use" basis that is equal to or less than that of traditional analog film. And they won't have to worry about leaving expensive flash memory cards with retail photo finishers.

The announcement was made at the annual Photo Marketing Association (PMA) trade show in Las Vegas where SanDisk is demonstrating products in booth L-70 in the South Hall of the Convention Center.

SanDisk officials believe that the Shoot & Store line will create profound changes in the way people think about taking pictures by removing the last barriers to the mass acceptance of digital photography. With its ease-of-use concept, Shoot & Store is intended to convince large numbers of consumers-especially those who have been hesitant to join the digital revolution-that now is the time to buy a digital camera. For the first time, SanDisk believes that it is both economical and efficient to use the same card for capturing and storing digital "negatives." This solves one of the most vexing problems of digital photography and allows people without computer skills-or without the time to download their images-to use a digital camera.

Distributing flash memory products through the food and drug channels is a first for SanDisk. Since December, the company has been test-marketing the concept at more than 800 retail outlets nationwide, including Kroger supermarkets. Other major retail chains-including Rite Aid drugstores-have already agreed to carry the Shoot & Store line. The low cost, convenience and simplicity of the cards are designed to generate new business to the stores that consumers visit frequently. The cards also provide options for consumers to get quality snapshots from the retailers' do-it-yourself photo kiosks or from in-house processing services instead of toiling over home printers to make photos that end up costing more and may be prone to fading in a few months.

Steve Lund, Rite Aid's Category Manager, said, "Rite Aid is excited to be the first in the drugstore industry to offer our customers an affordable and convenient option for digital technology. This further strengthens our strategy for digital photography, positioning Rite Aid stores as the convenient destination for flash memory cards and digital print processing."

The first card types in the Shoot & Store line are Compact Flash (CF), SD and SmartMedia. The CF and SD cards initially will be offered in 50-picture (32-megabyte) sizes while the SmartMedia cards will be offered with 50 pictures only. By the middle of the year, SanDisk plans to distribute 100-picture (64-megabyte) cards at an initial price of $24.99, as well as add other card formats including Memory Stick PRO and xD. (The number of pictures is approximate and is based on a 1-megapixel camera in high-resolution or fine mode. The actual number will vary depending on subject complexity and camera model.)

The Shoot & Store line also includes an optional SanDisk Digital Photo Viewer, which enables consumers to show their digital images on a television set-thereby eliminating the need to use a PC. For archiving purposes, SanDisk expects to offer, as an optional accessory at the same outlets, a CD-sized plastic jewel case that can accommodate many cards to be indexed and stored for easy retrieval in the future.

SanDisk officials believe that the cards are particularly attractive to users who don't have the time or desire to save their pictures on a home computer and would like to store them in their original form, just as they're accustomed to doing with film negatives. Consumers will be able to take their cards directly to professional photo finishers or kiosks at major retailers such as supermarkets, drug store chains and convenience stores, in some cases picking up their prints after shopping.

"With this new product line, we believe that we've lowered the cost of entry for digital film and that we're bringing the benefits of digital photography to people who may have been reluctant to make the switch," said Wes Brewer, senior director of retail product line marketing for SanDisk. "Now, we believe that everyone from soccer moms to senior citizens can enjoy taking digital photos without the hassle of transferring their images to another medium via a PC."

Brewer said the cost of printing photos from digital media tends to be less than from analog film negatives. "Comparing the cost of film, processing and printing of thirty-six 4x6-inch photos to the cost of a Shoot & Store card and a similar number of digital prints, we expect that consumers will find little difference in many cases," said Brewer. "But we believe that the advantages of digital flash memory-including the durability of the medium and the opportunity for users to select only the images they want to keep and print-outweigh any minor price variations between the two formats."

Christopher Chute, senior analyst for the Worldwide Digital Imaging Program of IDC, a global market research company, said Shoot & Store addresses two underserved markets. "One consists of people who have resisted digital photography because they perceived it to be too complicated or too expensive," he said. "Another consists of users who are new to digital imaging, who have just purchased a basic, 2-megapixel camera and prefer to use it in a way that is familiar to them from their experience with analog film cameras." He added: "By targeting traditional film and processing retailers, we believe that SanDisk has leveraged the best of their technology and channel presence to provide a strong value proposition to users and retailers in the rapidly growing digital camera market. Through the low price points, we believe that SanDisk can provide a comfort level for consumers and a viable, safe means to permanently store their images."

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