The company talks about several interesting applications. However, it’s one they don’t talk about that has the greatest promise.

HP’s new chips are called Memory Spots. They represent a way of bringing the digital world into the physical world. Initially, they’ll hold 1/2 megabyte of information. That’s not a lot by today’s standards, but it’s enough to hold a typical book and will rapidly multiply.

By using a cheap portable electronic device to touch a chip, it’ll be possible to read information stored on the chip or modify that information.

The chips can be embedded in all kinds of physical objects. It could, for example, lead to a new kind of greeting card experience. On a more serious note, the company expects these chips to be used to hold medical information on ID cards.

The medical information could be used to compare patient ID information against hospital or doctor’s records. It also supply crucial medical history to an ambulance crew so they immediately become aware of any serious allergies or special medical needs.

Unlike the highly touted radio frequency ID (RFID) tags, these are not intended to identify the devices to which they’re attached. Like RFIDs, they’re expected to be quite inexpensive — about $0.10 apiece when manufactured in volume.

Another similarity is that both technologies use weak radio waves to communicate. However, RFID works at distances up to several yards while memory spots require that the chip practically touch the scanner.

I can imagine all sorts of gaming applications. For example, it could enable a touch-sensitive chessboard that records all the games ever played on it.

I think one of the most promising applications will be in retail. Imagine walking into a store and being supplied with the loan of a handheld scanner by a friendly clerk.

As you walk down the aisles, looking for products of interest, you probably won’t need a person to help you understand the features and benefits. Instead, you’ll touch your scanner to a chip embedded in the product box or display.

The scanner will then display a small, narrated movie where you’ll see the product in action. Within five years, I expect this will evolve to the point that these displays will be interactive, and they’ll give you appropriate answers and demonstrations based upon the questions you ask.

Memory spots will also be able to offer data encryption features. I think this may be the “sleeper application.” As the government becomes ever more intrusive and less respectful of privacy and its own Constitution, people will be looking for effective means to safeguard their data. In addition, data thieves are becoming ever more sophisticated as is corporate espionage.

All of these threats to privacy and information security will drive people to seek inexpensive, easy to use methods of safeguarding data.

It doesn’t get much better than a 1.4 mm. 10-cent chip.

To your profitable future,
Jonathan Kolber
November 20, 2007

P.S.: Usually, medicine advances only in small steps: A less invasive form of surgery. A refinement to a medication that reduces its side effects. A minor advancement in materials for prosthetics or artificial cartilage… Rarely do big and truly significant medical breakthroughs happen. But when they do, look out.

Well, it just happened… One tiny, under-the-radar pharmaceuticals pioneer has brought America’s most dreaded disease to its knees… And now, you have the chance to make 30-60 times your money with it.

Investing in Digital Technology was originally featured in the Penny Sleuth.