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Sandisk Corporation, the world's largest flash data storage maker, said yesterday it will join hands with three Chinese IT product distributors to open more than 1,000 retail outlets in China by the end of 2005.

The US company said the popularity of digital cameras and third generation mobile handsets will shore up its business in China.

The three domestic distributors are Shanghai-based Genuine Electronic Co Ltd, Beijing-based Nice Gain Digital Co Ltd and Taiwan-based Princeton Technology C&C Corp. The companies together own more than 200 sales outlets in China.

The outlets are already selling SanDisk's products, including security digital memory card, memory stick card and USB flash drive.

SanDisk's ambition is to become a market leader in China in two years, according to Alex Chan, the firm's retail sales manager for Asian business.

Starting its Chinese business last September, SanDisk is China's third- largest flash data storage brand now.

"Storage-hungry portable communications and entertainment devices have become a daily necessity for an increasing number of Chinese business people and young consumers," said Nelson Chan, senior vice president & general manager of SanDisk.

"With more functions integrated in handset pro-ducts and the implementation of 3G technology, the storage capacity of current mobile phones can't meet consumers' demand. That is why many handsets will need a memory card slot."

About 5 percent of the 391 million mobile phones produced in 2002 have a memory card slot, according to IDC, a market research IT firm. The figure is expected to hit 23 percentage in 2005, when the number of newly-made handsets will reach 545 million.

But Yu Yang, chief consultant at Analysys Consulting Co Ltd, said that integrated digital camera mobile phones won't be popular in China until the end of next year when local handset makers have the technology to produce such phones in quantities.

On the other hand, since more people are willing to purchase digital cameras in China, there will be increasing demand for more memory cards.

"The size of digital picture files will grow dramatically when the camera technology develops further. That means many people will need one or more memory cards in the future," said SanDisk's Alex Chan.

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