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Technology Stocks : WDC/Sandisk Corporation

WDC 200.42

+6.8%

Jan 9 3:59 PM EST

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To: Howard R. Hansen who wrote (26750)	10/6/2004 4:58:49 PM
From: slacker711	Read Replies (1) of 60323

The wireless carriers want you to take pictures with their cell phones so you will use their service to tranmit the picture to your PC or to a printing service at a cost from 25 to 40 cents per picture. Hence if including a camera in a cell phone increases a wire carrier's revenue wireless carriers will subsidze the cost of a camera cell phone. But because you don't need to use a wireless carrier to transfer a picture to a PC if you have a removable memory slot wireless carriers will not subsidize the cost of a camera cell phone with a removable meory slot. Therefore with camera cell phones wth a removable merory slot having a premium price the camera cell phone flash memory market market will be a niche market. It is possible that the market could develop like this but I think it is unlikely....a couple of thoughts. - Thus far, carriers havent actually made much money with their MMS (photo/multimedia transfer) offerings. Most surveys show that while people are taking pictures they have yet to get in the habit of sending them. This may change as carriers get better at making these services more usable (particularly when sending across carriers) but the fact that they arent currently making money from these services has yet to stop them from subsidizing camera phones. The carrier business is intensively competitive and if one carrier stops subsidies, it just means that another carrier is going to get the business. - The best evidence that this is unlikely to happen is the fact that handsets like the Nokia 6230 (MMC) and the Motorola E398 (Transflash) have been been heavily subsidized since their launch. I just went to the Carphone Warehouse webpage (large UK mobile retailer) and on the front page they have an offer for the Nokia 6230 free on any UK network with a contract. carphonewarehouse.com My WAG would be that this handset has a $200+ wholesale price. Nokia has stated this handset potentially could be the largest selling mid-tier handset ever. I have a feeling that the features (MP3 player/MMC card/FM radio) are going to be extensively duplicated in Nokia's future offerings. Slacker

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