>>It seems like only the large companies have the scope to establish, and resources to defend new standards. <<
John, this is a very good point, but there are still many small companies that have preserved their IP. QUALCOMM is the best example, and while it is no longer very small, it was small a few years ago. But the difficulties that QUALCOMM is now having are similar to those of SanDisk. QUALCOMM finds that companies such as Nokia, which pioneered a different system for wireless, are able to use their influence politically to block acceptance of QUALCOMM's more efficient standard.
In the same way, SanDisk finds that the Sony MemoryStick has become major competition simply because Sony has the influence within the industry to convince buyers and retailers to use the MS in preference to CF or MMC/SDMC. Marketing muscle and political influence do go a long way to substitute for sheer performance and cost advantage.
The long term key to SanDisk's ability to be profitable is to focus on higher capacity cards, providing a convenient, rugged, low power storage device for images or any other type of digital files, at prices that are competitive with other forms of storage, such as the ZIP drive. The danger here is that storage prices fall to the point where no one can make a decent profit. This is the problem faced by IOMEGA, and one can only hope that SanDisk recognizes some of the similarities here and avoids the pitfalls.
Art |
