WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 163.00

-0.4%

Nov 7 3:59 PM EST

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To: EJhonsa who wrote (14844)	9/18/2000 11:46:47 AM
From: The Prophet	Read Replies (1) of 60323

Harari has said that SNDK enjoys 30% market share on flash cards. He has also said that approx 10% of sales last quarter were royalties and that he anticipates this ratio to continue, and that all flash card makers must necessarily use SNDK patents. So, applying the math: x = total market for flash cards y = SNDK royalty rate on flash cards .3x = SNDK market share (sales) .7x = Non-SNDK share (sales) .03x = SNDK royalties (.3x * 10%) .7x * y = .03x y = approx 4.2% This is obviously highly inexact, but is suggests a royalty rate of approx 4%. By the way, your analogy to QCOM's handset division is not quite applicable yet as SNDK enjoys a lead in proprietary technology called multilevel cell technology which allows them to build flash at 30% margins.

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