Hawk and Thread,
CompactFlash is SanDisk's flagship consumer product.
I can't help but conclude that yesterday's MONSTER stock appreciation on top of the MONSTER Q4 earnings report will be worth its weight in gold for SanDisk's consumer visibility. The quantum leap in the stock price was perhaps the cheapest, most effective piece of marketing available. Most importantly, it gives credence to the argument that SanDisk, despite what others on this Thread may believe, remains a relatively low profile company. The reason for this is not because of shoddy PR or lackluster marketing or ineffective advertising. The reason has been the fascination with the Internet and the plastering of the airways and printed media and television with internet upstarts. Well, I think that things are about to change radically.
I happened to buy yesterday's USA Today because there was a cover piece on Franklin's latest e-Book. I am interested in learning about e-Book and other "novelty" items like electronic picture frames capable of performing CompactFlash slide shows.
I opened the paper and on page A4 there is a 3/4 page advertisement for Epson's PhotoPC 850Z digital camera, as well as the PhotoPC 740 inkjet printer and an Epson scanner.
The reason I find it interesting is because of the increasing visibility of digital photography. As I stated earlier, had I not been interested in digital photography I would never have learned about SanDisk. If you will, digital photography is the first consumer "killer application" for flash memory and, in particular, CompactFlash. I trust that the SanDisk legacy will always be identified with the development of digital film at a time when the infrastructure (the ubiquitous PC and the Internet) for its wide spread application just happened to be newly and firmly cemented in our culture. The timing is impeccable.
Credit where credit is due.
SanDisk made an extremely important business decision while on allocation. This decision was to supply digital camera OEM's and retailers with CompactFlash preferentially over the last quarter. I think they deserve a lot of credit for having their finger on the pulse of the consumer maarket this past holiday season. The value chain for digital photography is the most evolved of any of the "megamarkets" that SanDisk serves. This value chain runs the gamut from the sub-$1,000 PC, to very inexpensive, user-friendly (and sophisticated!) photo editing software, to photo-embedded e-mail, to high quality inkjet printing and beyond.
Digital photography is habit forming, highly contagious and incurable.
Digital photography is hot! hot!! hot!!!
What about mp3?
I wanted to make several points as they relate to the compressed digital music market.
First, the Internet audio megamarket still finds itself in a state of confusion. Everyone and their brother is coming out with a CODEC or a security standard, content providers are still busy engaging Internet entrepreneurs in legal battles (i.e. mp3.com), copyright protection & secure content distribution channels are in their infancy, and high speed Internet connections are in the process of being built out. The weak links in the value chain are innumerous.
Second, please also recall that inexpensive flash memory is still not here in the storage capacity required for consumer use. That is to say, extremely spacious 15MB CompactFlash cards were available and sufficient when digital camera resolution was only 640 x 480. Contrast this to 16 and 32 MB SmartMedia cards made available for Diamond RIO when individual music file sizes occupy 3 to 5 MB!
The "sweet spot" for the mp3 market is a 64 MB card priced at some fraction (50%?) of the cost of the host device (where the host device is priced under $100.00). Further, I am not sure the necessary cost-efficiencies in miniaturized, high density flash memory cards is yet upon us. Even SanDisk has had difficulty with the stacked die techniques of manufacturing MMC. This may be a blessing in disquise because it brought the urgency to implement higher density flash chips such as 256Mbit/D2 to the forefront. In the meantime the value chain for the mp3 market still needs to become more refined. I suspect that the time frame of this refinement will occur in synch with SanDisk's production of extremely cost-competitive MMC and SD memory cards.
Finally, consumer spending habits of potential mp3 users is a totally different demographic compared to the typical digital camera user.
DIGITAL PHOTOGRAPHY REIGNS SUPREME.
I am looking forward to several things. First, there will be a large number of Mavica users looking to upgrade purchases this year. Sony has lost its one trump card...the floppy interface. It is time to move on, Sony. Your Mavica base will find a wide variety of high resolution alternatives in many sizes, shapes and colors. Most of their purchases will include a CompactFlash card. Second, Olympus appears to be serious about a gradual transition to CompactFlash. I have no doubt that my next digital camera purchase will be an Olympus. The designs are very exciting and the workmanship is top shelf. I hope that Fuji follows suit. Finally, CompactFlash will continue to emerge as a staple item for the digital photographer. It is a wonderful medium. It looks good. It is substantial. It feels good in the hand. It allows users to do wonderful things.
It will be forever linked with the success of SanDisk.
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