Kingston Technology Company Inc. this week introduced a USB flash drive that secures data using password protection and 128-bit hardware-based AES encryption.

Offering up to 4GB of secure storage, Kingston's DTE Privacy Edition device is designed to meet enterprise-level security and compliance requirements. The drive has a mechanism that locks out potential users after 25 consecutive failed password attempts.

Last month, SanDisk Corp. in Sunnyvale, Calif. announced it will bolster security in its line of USB flash drives and mobile cards using TrustedFlash technology. TrustedFlash combines SanDisk's 32-bit controller architecture with an embedded cryptographic engine to provide real-time encryption.

Eric Ouellet, vice president of research for security at Gartner Inc. in Stamford, Conn., said that only about 10 percent of enterprises have any policies dealing with removable storage devices.

'It's actually a fairly big problem,' Ouellet said. 'You've got so much space on these things now. You can go for an iPod or MP3 player and you've got 60GB or more on them. You can put a small database on them. It's just a matter of time before we hear about someone losing data because of this.'