Lucius, I think your point is very well taken: lots of the Wall Street folks think SNDK makes the gizzards inside all manner of 'electronic toys for boys'. In economists' lingo that translates into one thing and one thing only: discretionary spending, absolutely at the top of the list to be smacked in a recession. Circuit City reported yesterday and lost over 1/3 of their market cap in about three nanoseconds. Take a look at the charts for Costco, Home Depot, and even mother WalMart: the retail environment is very ugly.
I posted here last week asking an open question relating to digital cameras and underlying technical sophistication required of the user/customer. As always, the good folks on this thread responded liberally and thoughtfully. So now I'm armed with PC Magazine (November 7, 2000) issue, and staring at page 185 which has a 5 * rating and Editor's Choice selection out on the Kodak DC4800 Zoom. I also note a $700 price tag.
Without pulling any punches, that's a big number. I can easily afford to purchase such an item, but it's still a big number. And there are zillions of folks out there for whom it would be A VERY BIG NUMBER. And it's clearly not the final tab, since PC Mag recommends that I buy more CF memory, Nickel Hydride batteries, charger, sun tan lotion, and SNDK tee shirt (o.k. those last two were editorialized).
Do I think this means the end of the world for SNDK? Definitely not, as its memory products are finding their way into many different categories of consumer products. But it doesn't change the fact that all of those products (at least that I'm aware of) are in the 'discretionary' category. Ma and Pa Kettle do not absolutely positively have to buy a Palm Pilot this Winter, but they do have to heat their homes, a tab estimated to be 40% higher due to the oil price "situation".
I therefore suggest Wall Street is NOT off base to be cautious of SNDK going into an economic slowdown, and think Lucius is right on the money for pointing it out. mike doyle |
