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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: NY Stew who wrote (2543)	6/9/1999 3:52:00 AM
From: NY Stew	Respond to of 54805

In regards to Rambus, I like Rambus, was watching with the fingers today however what hand would I hold? Sure they are a fabless IP but do they have any recurring revenues? What seperates their mathematical properties from that of Gemstar? They both have clearly been given the blessings from the market leaders as segmented. Gemstar gets two to three times the royalties per unit and an unprecented stake in recurring revenues. The Murdochs and Malones are fighting with fevor but what of the AOL and Microsoft moves? What of Thomson and Sony (50% of large screen TV's in the US) or Hitachi in Japan? Deutsche Telekom in Germany? What of BellSouth or US West? All are exclusive carriers of Gemstar's technology. Tell me where I error. Uncle Frank? Mike? Lindybill? There is a current argument on the value of intellectual property but we may do best to speak low as a nation. The Asian countries would love to see our IPR values become even more meaningless. They could replicate what we do for a single unit cost at a thousand fold. Intel would surely not be happy. Right now IP rights are more of a threat to the well being of this nation than any nuclear device IMO. We simply cannot compete otherwise. Stew

To: NY Stew who wrote (2543)	6/9/1999 2:02:00 PM
From: Ausdauer	Read Replies (1) \| Respond to of 54805

Taking a Barometric Reading: Tornado or Monsoon? Will SanDisk's business plan succeed as we approach the stormy weather ahead? This is the final installation of my investment case for flash memory and digital photography. The content of my discussion will follow the table below. I am also including links back to prior chapters so as to facilitate participation by thread members who may have missed earlier portions of this presentation. Table of Contents Message 9880779 CHAPTER ONE Tornado Watch: The Unrealized Potential of Flash Memory in Digital Photography and Portable Consumer Electronics Message 9878229 CHAPTER TWO Discontinuous Innovation: The Fossilization of Kodak, Fuji and Agfa? Message 9897772 CHAPTER THREE Links in the Value Chain: The Essential Features of a Digital Darkroom Message 9920884 CHAPTER FOUR A Proprietary and Open Architecture: Distinguishing "Commodity" from "Commoditization" Message 9977057 CHAPTER FIVE Switching Costs: Can it Fit Inside a CompactFlash Slot? Will the CompactFlash form factor win out or facilitate other competing technologies? Message 10020997 SUMMARY Taking a Barometric Reading: Tornado or Monsoon? Will SanDisk's business plan succeed as we approach the stormy weather ahead? In concluding the discussion on digital photography and the role of flash memory in portable computing it would be useful to recap the highpoints of the previous five chapters. First, digital photography is coming of age. It is a technology previously held back by limitations of the key competencies essential for its success. Now that the individual pieces of the puzzle have fallen into place it is clear that very few impediments stand in the way of the adoption of this technology by average individuals. Flash memory, a component of the semiconductor industry, has played a role in accelerating the development of digital photographic equipment geared toward the consumer audience. Visionaries identified flash memory as an essential ingredient to the final consumer offerings. Possibly threatened by the feasibility of the technology and the growing popularity of digital solutions in other existing standards, the historic giants in emulsion film have embraced digital photography rather than trying to suppress or run from it. Unencumbered, a peaceful coexistence will likely be engineered by participants (Kodak, et. al.) able to influence the evolving digital imaging standards so as to minimize the "disruption" and "discontinuity" of other core business objectives. The digital darkroom and the professional darkroom will both have their place as we enter the next millennium. Further, digital photography builds on a pre-existing value platform created by the personal computer as a home appliance and the expanding infrastructure of the Internet. This platform has allowed for the layering and superimposition of the flash memory/digital photography value chain. And it appears for the time being that these technologies are intimately linked in many aspects, seeming to be "enabling" in a mutually beneficial manner. Indeed, the whirlwind created by the rapid growth in the digital photography industry has helped to carry flash memory across the "chasm" of indecision and safely away from a state of perpetual stagnation. This border crossing has received little recognition from the investment community at large, perhaps due to ongoing trepidation about the future of digital photography in the hands of the average, untrained end-user. CompactFlash, a form of flash memory with unique attributes, has been tapped on the shoulder by the digital camera industry (see list: compactflash.org after being identified as the most logical solution for non-volative, rugged removable storage. This resulted from a well-planned and methodical selection process by industry heavyweights, visionaries and "highly placed executives", not a random act of kindness. In return, the CompactFlash Association has made this defacto standard open to those wishing to utilize it, engendered an atmosphere which will lead to continuous improvements to the standard, and facilitated cross platform acceptance and compatibility beyond the boundaries of digital photography. SanDisk, the proprietor of the enabling technology, has contributed immeasurably to the development of the CompactFlash standard and, along with the other founding members of the CompactFlash Association, continues to oversee its communal development both as an innovator and manufacturer. This proprietary interest will hopefully propel SanDisk into further profitability and market recognition as consumers and manufacturers alike recognize the value and indispensable facets of the CompactFlash solution. Finally, the "commoditization" of the CompactFlash card (http://www.compactflash.org/guide/card.htm) and the ubiquity of the CompactFlash slot indicate that a displacing standard is likely several years away. The introduction of the CF+ standard and the CF type II form factor also help to entrench CompactFlash deep in the portable computing industry. Barometric Readings The chasm has been crossed. Flash memory has been swept over the abyss. It appears as if a tornado is coming. The digital photography, portable digital audio (mp3) and handheld computing/multimedia markets will enjoy exponential growth over the next several years. SanDisk stands at the foothills of these steep growth curves facing a near vertical ascent in demand for their flagship product. The inversion of the forces of supply and demand is certain to follow. Ausdauer