Steve, what I was saying was that if there was a glut on the market, causing prices to drop, that Lexar could benefit. That, as shown by Lexar's own data, did not happen. What happened was that demand remains strong, but that SanDisk has aggressively lowered prices.
The lower prices initiated by SanDisk may or may not have an adverse effect on SanDisk profits. If profits were to drop materially, as expected in the case of Lexar, then SanDisk would have to make a pre-earnings announcement to that effect. The key here is that SanDisk has made no announcement, which suggests that they don't expect profits to drop.
There is a tendency among some people to simplify news events. What's bad for Lexar is thought to be bad for the rest of the flash memory industry. What some people don't understand is that lower unit selling prices (i.e., lower prices per MB) don't necessarily mean lower profits, especially when you're talking about the low cost producer. The investment community (by which I mean the major money managers and investment firms) to use Eli's words, "Just doesn't get it."
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