WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 181.44

+1.0%

Dec 26 3:59 PM EST

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To: clix who wrote (27972)	4/22/2005 9:19:23 AM
From: Art Bechhoefer	Read Replies (2) of 60323

If Sandisk and Lexar combined have 2/3 of the flashcard market (at least in the US), and Lexar isn't interested in lower ASPs, who is doing it? Eli has often pointed out the highly elastic demand for flash memory (as prices fall, demand goes up). SanDisk in the past has driven prices down in order to capitalize on this elasticity of demand. The SanDisk strategy is similar to that employed successfully by Intel in the 19990's, bringing out new, higher performing chips and at the same time driving down the prices of older models, forcing competitors to cut prices, and also creating capital shortages for competitor research, thereby assuring Intel's continued ability to remain on the cutting edge of technology. In short, I think the evidence demonstrates that the overall SNDK strategy is to cut prices to the bone and remain the dominant manufacturing/retailing force in the industry. I was unable to listen to the cc and wonder if anyone discussed the potential implications of the Lexar-Toshiba lawsuits. Art

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