Microsoft Licenses exFAT to Research In Motion
Microsoft said that it has entered a licensing agreement with Research in Motion that provides the company with the ability to integrate the latest Extended File Allocation Table (exFAT) for "certain Blackberry devices".
"Today's smartphones and tablets require the capacity to display richer images and data than traditional cellular phones," said David Kaefer, general manager of Intellectual Property Licensing at Microsoft, in a prepared statement. "This agreement with RIM highlights how a modern file system, such as exFAT can help directly address the specific needs of customers in the mobile industry."
exFAT, developed as a file system specifically for flash memory devices, is used as a successor for FAT in all scenarios where NTFS does not make much sense. Versus FAT, exFAT extends the maximum file size a flash memory device can work with by a factor of five, as well as an increase of storage capacity support from 32 GB to 256 TB. In a single directory, exFAT can handle up to 2,796,202 individual files.
At this time, exFAT is supported by Windows XP SP2 (with exFAT patch upgrade) and above, as well as Mac OS X 10.6.6 and above.
Microsoft said that it has entered into similar licensing agreements with companies such as Panasonic, Sanyo, Sony and Canon.

hoping in a few more years Apple will simply mean fruit again
hoping in a few more years Apple will simply mean fruit again
FAT =/= exFAT
SD cards show less space because of bit/byte conversions.
exFAT is FAT with extensions added to it for larger files and metadata. It's only used in low power devices because it's less computationally expensive. It's not used in any other medium because it uses several times more space than any other modern filesystem. Read the literature first before you comment.
If that were so then they would show more, not less space. Flash memory capacities are 2^x vs hard-disks that are 10^x, which is why they show less space. Doesn't apply here.
From what I see flash drives are numbered based on base 10 just like HDDs, every flash drive I have formats with the exact amount of space as a GB would be in GiB.
My Galaxy SIII has 32gb on board memory and I have a Class 10 64GB sandisk micro sdxchc card in the memory card slot. The only phone that will pass 96GB in total capacity is when 1. the 64gb (internal memory GS2 comes out in the next 2 months (128gb total storage space) and/or when the 128gb Micro SDHC cards come out in a month or 2.
I will be waiting for the 128gb memory cards to come out and pick one up on day 1. Same for the 256GB, 512GB, 1TB and 2 TB (estimated release 24 months from now).
Then we will need a new file format to support 3TB + on smart phones, mp3 players, etc.
NTFS isn't good for memory cards, though, as others have mentioned. It has a lot of advanced features that are awesome but introduce too much overhead. So we've got exFAT for future flash card-type needs, and eventually ReFS for primary storage on PCs (and perhaps eventually main storage on other devices).