that is the capacity after formatting. Storage manufacturers define 1GB as 1 billion bytes. Operating systems however define a GB as 2 to the 30th power. It has always been this was since computers were invented. Even your HDD will show a smaller formatted capacity than the actual drive raw storage capacity. see the knowledgebase article below.
http://kb.sandisk.com/app/answers/detail/a_id/46/
Capacity of the device (as reported by many operating systems) does not match its label
Why is the capacity of my device (as reported by many operating systems) different than the capacity that is listed on its label?
Definitions of a Megabyte :
1. Operating Systems commonly define capacity as follows:
- Kilobyte (KB) as: 2 to the 10th power (1,024 bytes)
- Megabyte (MB) as: 2 to the 20th power (1,024 X 1,024 bytes = 1,048,576 bytes)
- Gigabyte (GB) as: 2 to the 30th power (1,024 X 1,024 X 1,024 bytes = 1,073,741,824 bytes)
2. Disk Drive and Flash Memory Card Manufacturers commonly define a MB as one million bytes (exactly 1,000,000 bytes) and a GB as one billion bytes (exactly 1,000,000,000 bytes).
SanDisk defines 1 GB as 1,000,000,000 bytes. Operating Systems define 1 GB as 1,073,741,824 BYTES.
Note: Some capacity is used for formatting and other functions and thus not available for data storage.