E-Mail | Print | Comments | Request Reprints | E-Mail Newsletters | RSS

By This Author Louis Hau Eat This Ad The Apple-NBC Battle Won't Amount To Much Newspaper Ad Decline Accelerates More Headlines RSS News Feed Related Quotes AAPL 136.06 - 0.65 AMZN 85.11 + 1.77 CREAF 3.85 + 0.00 MSFT 28.92 + 0.44 SNDK 54.17 + 0.41 SNE 47.39 + 0.66 Related Stories iWhat? If You Can't Beat 'Em... How Fresh Is Apple? At CES, Deja Vu Beware The Label Tax

When Apple releases new versions of its market-dominating iPod, it usually leaves competing device makers choking on its exhaust fumes.

But not everyone has been crushed by the iPod juggernaut.

SanDisk (nasdaq: SNDK - news - people ), the Milpitas, Calif., maker of flash memory and USB drives, has managed to accomplish what technology giants like Sony (nyse: SNE - news - people ), Samsung and Microsoft (nasdaq: MSFT - news - people ) failed to do: snare a sizable chunk of the U.S. market for portable digital media players.

And while Apple's (nasdaq: AAPL - news - people ) iPod accounted for 71% of U.S. unit sales during the first six months of this year, according to NPD Group, down from 76% during the same period last year, SanDisk was a very distant, but still impressive, second, with 10%, share, up from 9% a year earlier. Rounding out the rest of the top five were Creative Technology (nasdaq: CREAF - news - people ) at 4%, Microsoft at 3% and Samsung with 2%. Market share for Sony wasn't immediately available, but clearly wasn't significant.

"Apple is out there and it is the 800-pound gorilla,'' says Mitch Cohen, SanDisk vice president of operations, engineering and product management. "Our mission and our goal is not to supplant Apple but to grow our space. ... Being No. 2 is just fine for the company."

SanDisk's secret for success? Keep it simple.

The company made no ambitious efforts to set up its own online music store to rival Apple's iTunes Store, as Microsoft did with its Zune Marketplace and Sony tried with its Connect Music Service, scheduled to be shuttered next year.

Nor did it come up with a brand-new file format, as Sony did with its soon-to-be discontinued ATRAC, which requires Sony hardware and software to play.

SanDisk didn't even attempt to go head-to-head with Apple's flagship hard-drive iPod player, as Microsoft did with the Zune. Instead, the company entered the market in 2004 with a basic flash player and has focused most of its efforts on the sub-$200 end of the digital player market, with devices that compete with Apple's flash players, the iPod Shuffle and the iPod Nano.

Flash is SanDisk's natural forte. As a leading manufacturer of the chips, the company enjoys cost advantages over rivals. And because the SanDisk brand was already associated with memory cards and USB devices, it wasn't a great leap for customers to accept a flash music player from the same company.

The company has also updated its product line continuously. While Apple grabbed the media's attention with a slew of updates to the iPod family last week, SanDisk has been preparing the launch next month of new digital players of its own. Both are arguably better positioned to battle the glitz and glamour of the iPod name than the company's previous devices.