SimpleTech Teams Up With Napster

The Orange County Register (registration required) writes that memory company SimpleTech is teaming up with Napster to offer Napster-branded storage products, such as flash memory cards and USB key drives, which will offer a few free song downloads and a trial subscription to Napster's online music service.

Semiconductor and memory analyst Joseph Unsworth at Gartner said, "The partnership is a good idea and will probably be copied. I do think we will see a lot more of this. When you think of SimpleTech, you don't think, 'Wow, this is a flash drive company well known in the U.S.' But with Napster, it's certainly a great way for SimpleTech to gain a greater retail presence."

According to Gartner, Flash memory sales grew 64 percent last year from the prior year to $6.8 billion. This year, Gartner projects 38 percent sales growth to $9.4 billion. "The flash drive industry is becoming a commoditized market. (Memory companies) are trying to think of ways to differentiate their product," Unsworth added

Gerry Purdy at MobileTrax thinks the deal is a gimmick that just might work. "If you're looking at buying a flash drive and one of the four on the shelf offers free music from a brand you know, you're probably going to buy that product instead of another," Purdy said.

The article cites figures from Forrester that consumers spent $201 million downloading music last year, more than double the prior year. Forrester projects the market to grow to $4.6 billion in downloads and music subscription services by 2008.

One of my clients is trying to do something similar, and I definitely believe there is a market for selling/bundling content on memory products, depending on the usage model and target. We're still in the early stages so expect to see plenty of different business models tested to see what sticks...