SanDisk (NASDAQ: SNDK) The Flash Memory Pure Play
SanDisk, a leading edge semiconductor manufacturer
and inventor of CompactFlash and the MultiMediaCard,
is well-positioned to benefit from the upcoming demand
for removable flash memory cards in the Post-PC era.
company website ==> sandisk.com
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Part I of II
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I. Introduction: Welcome to the Post-PC Era!
May I interest you in a digital camera? How about an MP3 player?
We are entering an era where personal computing will become completely untethered from the desktop. This is known as "The Post-PC Era" and it will allow people to incorporate new and exciting forms of "computing" into their daily lives. Yes, "personal computing" is about to become a lot more personal. SanDisk's innovations comprise a key enabling technology that makes this all possible. Removable flash memory, a form of "non-volatile" memory that requires no power source to retain its data, is to handheld devices what the hard drive was to the PC. More than that, flash memory represents the sum total of the floppy, CD-ROM, Zip and DVD drives for many present and upcoming portable electronics devices.
Removable flash memory is a final common denominator in devices such as digital cameras, MP3 players, handheld computers, e-Books intelligent cellular phones and the like.
CompactFlash, MultiMediaCard and Secure Digital Memory Card, three standards which have come about as a result of SanDisk's pioneering efforts, may prove to be the "digital currency" of the Post-PC era. That is, both a "final common denominator" and a "common denomination" for digital storage.
The rising demand for portable computing devices is evident everywhere. Digital cameras threaten the primacy of emulsion film. The use of compressed audio files, also known as MP3 files, is turning the music industry on its head. Handheld computers are just about everywhere you look. And soon a new generation of wireless phones will revolutionize the tranmission of data, both for business and pleasure. Each of these devices requires a storage solution. Flash memory, in particular removable flash memory cards, are well-suited for these tasks. And with each new wave of devices that hit the market, electronics manufacturers are gravitating toward unifying solutions for storage. The spontaneous and universal adoption of specific flash memory card types by OEM's(original equipment manufacturers) usually leads to the crowning of a single de facto standard which serves to simplify both manufacturing design and, most importantly, the end user experience. To date the leading memory card types are as follows...
SanDisk's CompactFlash Card.............................."digital film"
SanDisk's MultiMedia Card.........................."digital cassette tape/CD"
SanDisk's Secure Digital Memory Card.......copyrighted digital material
[note: Secure Digital Memory Card was co-developed by SanDisk, Toshiba and Matsushita]
It is clear that the universality of flash memory in these applications will disrupt other established standards with which we are all familiar. In the world of photography and photo developing, CompactFlash threatens standard emulsion film. A CompactFlash card is perhaps "the last roll of film" you will ever need to buy. If you will, it is the "Everlasting Gobstopper" of the camera industry. It is no mystery then why Kodak was one of the first visionary companies which decided to incorporate CompactFlash in their line of digital cameras. For those who have not experienced digital photography first hand I suggest you take a look results one can expect with a 2.1 megapixel digital camera...
2.1 megapixel album ==> albums.photopoint.com
[After purchasing my first digital camera some two years ago I came to the immediate conclusion that digital photography is addictive, habit-forming, highly infectious and totally incurable. Those who own digital cameras likely share the same feelings.]
Likewise, the music industry is faced with a monumental task of completely retooling their procedures for the production, promotion, distribution and sale of music and other copyrighted content. The driving force behind this movement is the Internet and it would appear that it is unstoppable at this point. The genie is out of the bottle and he has no intention of returning. But you don't have to believe me. Just ask any 15 year old you happen to see.
Digital Photography and MP3/Internet Audio represent potential megamarkets for removable flash memory cards. They represent "killer apps" for flash memory producers. The potential size of these combined markets is immense, perhaps unfathomable.
It is for this reason that the disruptive force of flash memory in these extremely large consumer markets places SanDisk in an unusually advantageous position. As consumer demand for such items as digital cameras and MP3 players grows, the sales of removable flash memory cards will grow in step. It is this potential, along with SanDisk's intellectual property rights (patents), that suggests that SanDisk become a dominant player in the semiconductor industry over the next several years. I will go so far to say that SanDisk, as the direct beneficiary of these consumer megamarkets, has the potential to reach "Gorilla" status. It is this realization that lead me to write a lengthy investment thesis about flash memory exactly one year ago. For those that are interested this thesis may be reached at the following link:
[Gorilla Game ==> Message 13792522
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II. A Flash Memory Primer
What is "flash memory" exactly?
flash memory summaries:
less technical ==> abcnews.go.com
more technical ==> microsoft.com
Flash memory is a silicon-based (semiconductor) memory type that has the unique ability to retain large amounts of data without a source of power. Unlike your home PC that requires software to be rewritten to RAM memory each time it is shut down & booted up, flash memory is non-volatile. It does not require that the host device be connected to a wall outlet. In fact, flash memory does not even require a battery. What is more impressive is the fact that flash memory has no moving parts. Thus, it is not only non-volatile, but it is also rugged. It is exactly these properties that makes flash memory ideal for the storage of data files such as digital images, music, books, maps and just about anything else that can be digitized and compressed.
Flash memory types can generally be distinguished by three general properties (this is an oversimplification):
i) low density vs. high density,
ii) embedded vs. removable, and
iii) software code storage vs. data storage
SanDisk specializes in high density, removable flash memory for data storage for consumer use and high capacity removable and embedded flash drive devices for industry.
Flash memory comes in several different forms as well. One form is used discrete or monolithic applications such as embedded flash integrated circuits used for storage of software code such as the BIOS in a desktop PC. These tend to be lower density flash chips that are permanently embedded in a host device. A second form of flash memory could be an embedded flash drive that mimics a rotating disk drive. These would be used in high capacity storage applications where data preservation was crucial, such as military computers, industrial applications or medical devices. Yet a third form of flash memory would be a flash module used for code storage in such things as network routers, printers and other electronic equipment. The other form of flash memory includes the high density storage cards which are removable. These cards are used in devices such as digital cameras, MP3 players and handheld computers for the semi-permanent storage of personal files, images and music. It is this last category where SanDisk excels.
SanDisk's entire product line is summarized at the following site:
flashmemory.com.au
SanDisk pioneered industry development of flash memory cards for data storage and played a key role in setting many flash industry standards. It was one of the first members of the Personal Computer Memory Card International Association (PCMCIA) and a founding member of the CompactFlash Association and the MultiMediaCard Association. SanDisk was the first company to produce industry-standard ATA (AT Attachment) flash cards, 1.3", 1.8" and 2.5" flashdrives and CompactFlash (CF) cards. It was the first company to introduce a flash MultiMediaCard, an ultra-small size form factor memory card. SanDisk industry-standard ATA PC Cards are "plug and play" in numerous computing, imaging and communications products including portable computers, handheld data collection computers, HPCs, digital cameras and mobile phones. SanDisk embedded flash data storage devices also are widely used for numerous commercial and industrial applications in various markets including telecommunications, transportation, aerospace, health care and government. Market research firms have concluded that SanDisk is the flash card market leader with a 40-45 percent share of the market. Market researchers report that the worldwide flash card market generated about $225 million in sales during 1998.
SEE PART II at Message 13808089;
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Best of Luck to All SanDisk Longs!
Ausdauer
SanDisk...See the BIG picture!
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[formerly: What are their prospects?]
started by Bhag Karamchandani on Jan 31, 1996
Would any one care to enlighten the rest of us as to how SanDisk is positioned in the Flash memory market in relation to their competition and earnings potential? |
