Steve,
Eli did say that supply and demand were coming into balance, in the 3Q CC. I posted the comment, I probably should have referenced it and followed up on the question. I didn't.
What followed the CC, were folks that were unanimously positive on the thread, then the ML report on supply/demand being tight through most of 2001. Was I listening to a different CC as everybody else? Nobody else mentioned the comment. I thought it was the most significant piece.
re: "reduced backlog"
I think two things are at play here. One is that the OEM's started cutting back on orders in December, and not issuing new purchase orders, so there is some visibility that SanDisk has into the first quarter, and that is that the OEM's have sufficient inventory to carry them through. Second is retail: that 1Q is a seasonally weak quarter for retail in general, and (guessing here) probably even weaker for photo stuff (you could probably check Kodak historic revenues for this, I haven't). In fact I'm guessing that in the future sales for SanDisk stuff will always slow in the 1st two quarters, and start picking up as folks plan their summer vacations. New applications may help to smooth this seasonality.
But I am also confused by the extent or degree of the problem, as stated in the PR and the CC. Everybody is saying that digi cameras were one of the very best categories for the Christmas season. Hard to believe that sales would completely dry up in the fast growing category. It would be interesting to see what SanDisk YoY 4Q capacity was, maybe they are just making too much stuff?
John |
