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msystems™ Launches FlashDisc™ – a New Flash-Based Media Category


WEBWIRE

FlashDisc introduces a new way of sharing data

SUNNYVALE, Calif., March 15, 2006, msystems (Nasdaq: FLSH), a leader in smart personal storage, today introduced FlashDisc, a new and promising flash-based storage category marketed in conjunction with its global brand partners.

FlashDisc offers the ubiquitous and simple USB interface, which allows sharing of data on virtually any PC or Mac. With 16 to 32 megabytes packed into an innovative design, people can use FlashDisc to store and share approximately 400-800 documents, 10-20 presentations, 40-80 photos or 15-30 minutes of music.

“With the decline of the floppy diskette as a widely-used storage medium, the megabit growth and increased functionality of our U3 smart drives, people are confronted with an apparently unmet need to easily and affordably share photos, documents and other files with family, friends and work colleagues,” said Tzipi Ozer-Armon, general manager for msystems’ Retail and Enterprise division. “Anticipating the growing acuteness of this need, msystems is proud to present FlashDisc, an exciting new category poised to radically transform the way people share their data. Together with our global brand partners, we are bringing FlashDisc onto the retail media shelf for this exciting new expansion opportunity.”

“In recent market research conducted on our behalf, we have identified an apparently unmet consumer need for small, easy to use, rewritable media with storage density higher than floppy diskettes, but lower than that of personal USB flash drives typically used today,” said Noam Kedem, vice president of marketing for msystems. “msystems’ FlashDisc is an ideal media for sharing, which meets these requirements and promises an added growth opportunity for msystems, leveraging our flash management expertise, USB flash drive IP, strategic flash supply agreements and established brand partner channels. This new media category is expected to tap into new mass-market segments, educating new users about the smart benefits of flash-based, data storage.”

“At msystems, innovation is a way of life,” said Dov Moran, president and CEO of msystems. “From TrueFFS® to mDOC to mDrive (formerly DiskOnKey®), we have certainly invented our fair share of technology. But, innovation for us is not only about inventing technology. Innovation at msystems also means creating new markets and product categories. With this in mind, we developed FlashDisc, which represents yet another example of how msystems keeps innovating to target new and yet untapped revenue streams. FlashDisc is the floppy reincarnated in USB flash drive form. A floppy diskette - made smarter.”
FlashDisc will be launched in stores during March and April.

About msystems
msystems has been transforming raw flash material into smarter storage solutions since 1989. From embedded flash drives deployed in millions of mobile handsets to U3 USB smart drives designed for leading global brands, msystems creates, develops, manufactures and markets smart personal storage solutions for a myriad of applications targeting high growth markets. msystems’ product lines include:

* mDrive (formerly DiskOnKey®) U3 USB smart drives for personal, portable computing
* mDOC embedded flash drives for mobile handsets and consumer electronics devices
* mSIM MegaSIM® series high-density SIM cards and mSIM M.MAR® series SIM cards and highly secure cards (available both from msystems and its subsidiary Microelectronica)
* mCard, high-quality memory cards for mobile handsets and digital cameras
* mTrust (formerly Xkey®) end-to-end enterprise access, control and management solution for USB flash drives and other removable media
* mSSD (formerly FFD™) rugged solid state disks for mission-critical applications
* mModule (formerly DiskOnChip® modular family) modular flash storage for embedded systems
* mSafe (formerly SuperMAP® family) secure hardware and software crypto cores

More information is available online at www.m-systems.com. msystems. made smarter.

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All company and product names mentioned may be trademarks or registered trademarks of their respective holders and are used for identification purposes only. msystems is registered as M-Systems Flash Disk Pioneers, Ltd.

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 msystems’ 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 msystems’ 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 msystems’ 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 msystems’ and its customers’ products; and other risk factors detailed from time to time in msystems’ filings with the Securities and Exchange Commission. msystems 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 msystems’ website above does not constitute incorporation of any of the information thereon into this press release.



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