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Non-Tech : The New Iomega '2000' Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Cogito who wrote (1458)	7/6/1999 3:11:00 PM
From: Rocky Reid	Respond to of 5023

>>How is Sandisk going to maintain any pricing power going forward? And without pricing power, how are they ever going to justify their high valuations?<< Good question. An even better question is can Sandisk economize the production costs to offset the falling prices for CompactFlash™ and MulitMediaCard™? Volume should continue to increase more rapidly as prices come down, so revenues should continue to increase. And more and more devices jump on the CF bandwagon every other day. But your question remains the one analysts ask the most about this whole sector. All I can say is that Sandisk has the momentum. And momentum counts for a lot in this present market.

To: Cogito who wrote (1458)	7/6/1999 5:43:00 PM
From: Ausdauer	Read Replies (1) \| Respond to of 5023

Allen, How is Sandisk going to maintain any pricing power going forward? And without pricing power, how are they ever going to justify their high valuations? royalties, royalties, royalties The will earn $1.20 share per year in gross royalty receipts this year alone. That is before a single CF, SmartMedia or MMC card is sold on the street or packaged into a bundle to ship with a digital camera, color PDA or mp3 player. You guys gotta do your homework (before somebody does it for you... ...and eats your lunch at the same time). Ausdauer

To: Cogito who wrote (1458)	7/7/1999 9:23:00 AM
From: Ausdauer	Read Replies (1) \| Respond to of 5023

Allen, You stated to Rocky... Looking at Sandisk's upward climb, I have to wonder. Their main product is flash memory. The average selling prices for flash memory, as well as for the devices which use it, are falling rapidly. How is Sandisk going to maintain any pricing power going forward? And without pricing power, how are they ever going to justify their high valuations? I replied... Royalties from the IP I should also add volume sales. I apologize for lecturing, but you stated your question in a disparaging way with "wonderment" (disbelief?) and implications that SanDisk is selling commodity items. I assumed (a reasonable assumption, I believe) that you had done some investigation of their business model before calling Rocky to the carpet. It just raised the hair on the back of my neck a bit. Also, the fall in prices in the devices using flash memory will only fuel volume sales of removable flash memory, so that argument just doesn't stand up to scrutiny. Finally, the company doesn't "justify" its high valuation. It is simply a value the market assigns to the promise of a given company. At some point in any small cap high tech company the market valuation is some multiple of the book value. It is a sign of investor's confidence in the growth potential of that company. Aus