ISRAEL 
HIGH-TECH & INVESTMENT REPORT

from the February 2006 issue


PC World names M-Systems' DiskOnKey' 9th best gadget in the world

For 20 years people had been predicting the death of the floppy, but it took a gadget the size of your thumb to actually sound the death knell. With 8MB to 32MB of flash memory at its introduction in November 2000, the DiskOnKey was easier to use than a diskette, and was the first device of its type that didn't need drivers for your PC. You just plugged it into a USB port, copied files to it, and popped it back into your pocket. Suddenly, moving big files from one computer to another was no longer a hassle

DiskOnKey by M-Systems (Nasdaq: FLSH) was listed in ninth place out of the fifty most successful gadgets of the past 50 years in a list compiled by the PC World magazine. DiskOnKey is a data storage device the size of a key chain, able to store various types of files.

M-Systems introduced it to the market five years ago with a limited capacity of several megabytes; today's models are able to store several gigabytes. This relatively large capacity allows their owners to store vast amounts of data, such as high-resolution digital pictures, presentations, and basically any other file.

DiskOnKey led M-Systems to phenomenal growth over the past several years, and today it represents about 70% of its revenues, which totaled $ 133 million in the third quarter. Since its introduction, it has had numerous imitators, mainly from the Far East. Nonetheless M-Systems claims that its product's quality is superior to those of its competitors in areas such as the speed of loading files.

The top spot on the magazine's list of gadgets went to Sony's storied Walkman, which was launched in 1979. Number two was Apple's iPod, and recording device Tivo rounded out the top three.

M-Systems Flash Disk Pioneers Ltd. (Nasdaq: FLSH),a leader in flash disk data storage products for the Internet appliance and network infrastructure markets, announced that its DiskOnKeyTM division has developed a new, universal, portable secured data storage device based on flash memory. The product, an ergonomically designed pocketable, pen-sized device, is based on M-Systems' patented core TrueFFS® technology, as well as on the company's newly developed and patented DiskOnKey technology. The product is compatible with all major operating systems and connects directly into a USB (Universal Serial Bus) port with no driver installation required.

M-Systems Flash Disk Pioneers Ltd. (Nasdaq: FLSH) is a leading developer, manufacturer and marketer of innovative data storage products, known as flash disks, that are primarily used in Internet appliances, network infrastructure equipment and other embedded systems. The Company's flash disk provide the functionality of a mechanical hard drive on a solid-state silicon chip. M-Systems was first to bring to market a complete flash disk in a single die, using breakthrough DiskOnChip Millennium technology. The Company's products are based on its patented TrueFFS technology, and include the DiskOnChip and Fast Flash Disk (FFD) families.



Reprinted from the Israel High-Tech & Investment Report February 2006

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