Kingston Technology released a statement yesterday giving U3 the axe for pre-installation on USB flash drives. Kingston will stop selling the U3 product because the royalty fees are too great for the price sensitive flash memory market.
Kingston explained its decision in saying that extra bundled software means additional costs for consumers. The company already has its own similar platform to substitute for U3, according to company sources.
According to some IC controller design houses, SanDisk - the big player advocating U3 - charges about a 5% royalty fee for adopting the U3 platform.
Is the move from Kingston a sign that other memory module houses will follow suite and drop the U3 platform and associated royalty fees? Maybe, as it was reported last month U3 booked about 12 million in sales during 2006, or should I say 12 million in royalty fees.
Source: Digi Times
