Craig, I value your comments on marketing, which is not an area I specialize in. You may be right that the average consumer cares less about brand name or specifications and more about price, on the assumption that all flash cards, regardless of manufacture, will get the job done. This doesn't mean, however, that SanDisk hasn't established a brand name with some appeal.
Here are the things about SanDisk that I value, in addition to its strong balance sheet: First, the company works very hard and is quite successful at establishing retail outlets throughout the world. I can't tell if they're better at this than Samsung, but the point is that SanDisk has become a major supplier to worldwide markets for flash memory cards.
Second, I pay attention to analyst recommendations for competitors such as Lexar. Right now, Lexar is getting some pretty positive buy recommendations. Yet Lexar is in a rather precarious position of having to depend on other fabricators, such as Samsung, and must pay royalties on certain cards, such as SD, to SanDisk. Lexar does seem to have cards that perform better than SanDisk, but if what you say is true about what people look for -- price more than anything else -- then I would conclude that Lexar is at a distinct disadvantage when it comes to price, especially during a period of rapid growth in demand.
My point is that if Lexar is a buy, then SanDisk is a much better, safer buy, judging both stocks at current prices.
Art |
