BusinessWire
October 20, 2005 05:00 AM US Pacific Timezone

M-Systems Announces Availability of U3 Smart Drives from Leading OEMs; Drives Utilize an Innovative, Newly Designed M-Systems ASIC at Their Core

SUNNYVALE, Calif.--(BUSINESS WIRE)--Oct. 20, 2005--M-Systems (NASDAQ:FLSH), an industry leader and innovator of flash-based data storage devices and co-founder of U3 LLC, today announced availability of U3 smart drives through its vast OEM network.

Building on its patented USB Flash Drive (UFD) category's success, M-Systems' U3 smart drives enable consumers to securely store, access and control their personal information and applications practically anytime and anywhere.

As M-Systems' OEM partners who have already adopted U3, including Clever Stuff, Data Storage, Dexxon Data Media, Kingston, Memorex and Verbatim, begin to sell U3 smart drives into the mass market, and with other European and Asia-Pacific OEM partners expected to shift to U3 smart drives during 2006, this announcement points towards a wider industry trend. In a recent study, Gartner projects that by 2009 worldwide shipments of USB Flash Drives will reach 173.2 million units with smart drives accounting for 69 percent of the total.

"As leaders and innovators in the USB Flash Drive category, we understand the need for a smarter platform which offers greater security, mobility and personalization. Through our growing OEM network, we foresee the U3 platform playing an important role in the future of mobile personal computing by shifting the balance of computing power from our desks into our pockets, a shift M-Systems is spearheading in more ways than one. The products now being offered by our OEM partners transform simple USB Flash Drives into even more useful, productive and fun devices," said Noam Kedem, vice president marketing for M-Systems. "Our support of the U3 platform reinforces the commitment to our partners, providing them with an opportunity to generate new revenues and revenue streams while differentiating their product offerings in an increasingly competitive market."

M-Systems combines U3's innovative smart drive computing platform with a new generation of its application-specific integrated circuits (ASICs), dubbed "S1", for the creation of its U3 smart drives. The S1 ASIC enhances application performance and, when combined with U3 device software, enables users to carry personal data as well as their computing preferences and applications (including e-mail, music, digital photos and Internet access) on one secure device. Ready to securely run personal applications, the S1 ASIC also incorporates security features such as password access control and a "hacker-proof," maximum number of attempts (MAX NOA) mechanism. Features like these, in addition to a configurable, pre-designated secure zone, enable the safe storage of applications and data on the U3 smart drive. S1's fast processor speed and logic help make these security features transparent and easy to use.

About M-Systems

M-Systems develops, manufactures and markets innovative flash-based data storage solutions for consumer electronics and embedded markets. The Company targets the fast growing multimedia mobile handset market with its DiskOnChip(R) and MegaSIM(TM) solutions and the popular USB flash drive market with its DiskOnKey(R) product. More information about M-Systems is available online at www.m-systems.com.

All company and product names mentioned may be trademarks or registered trademarks of their respective holders and are used for identification purposes only.

This press release includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties which may cause actual results to vary significantly. These risks include, but are not limited to: the effect of global economic conditions in general and conditions in M-Systems' industry and target markets in particular, shifts in supply and demand, market acceptance, the impact of competitive products and pricing, product development, commercialization and technological difficulties, and capacity and supply constraints including dependence on flash component suppliers; changes in M-Systems' and its customers' inventory levels and inventory valuations; timely product and technology development/upgrades and the ability to manage changes in market conditions as needed; market acceptance of new products and continuing product demand; the impact of competitive products and pricing on M-Systems' and its customers' products and markets; the development, release and sale of new products by strategic suppliers and customers; the development and growth of anticipated markets for M-Systems' and its customers' products; and other risk factors detailed from time to time in M-Systems' filings with the Securities and Exchange Commission. M-Systems assumes no obligation to update the information in this press release and disclaims any obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Reference to M-Systems' website above does not constitute incorporation of any of the information thereon into this press release.